Television prices plummet at a store near you

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GAME ON: Retailers are now happy to compete on price as the market for plasma and LCD television screens has grown.

The time may be right to splash out on a flat-screen after television price wars caused the biggest single category dip in the consumer price index for the June quarter.

The 4.6 per cent decrease in the audio-visual and computer equipment category for the quarter was not a surprise for those in the industry, who have witnessed a steady plummet in TV prices in recent years.

The category's prices for the June 2010 quarter were down 17.5 per cent on the same period last year, which in turn was down 10.7 per cent on the same period for 2008, says Statistics New Zealand.

Noel Leeming Group merchandise general manager Jason Bell says consumer electronics is "one of the most competitive retail industries there is.

"In the audio-visual category televisions are by far the biggest part, and with flat panel [LCD and plasma screens] over the last couple of years we've seen a huge price erosion.

"When you look at where LCD and plasma TVs were a few years ago – at that $20,000 price point it was quite a limited market – so as prices come down it appeals to more of a mass market and you get increased demand.

"It's when it gets to the point that you're not necessarily increasing the units but price continues to go down that that becomes an issue."

Electronic appliance retailer Magness Benrow has three stores across Auckland and manager Adrienne Harrison says competition in audio-visual goods is "cut-throat".

"We'll be scanning the papers to see what our opposition's going to do at the weekend and then we sit down, do our figures and go out to counteract them – we have to otherwise we wouldn't survive."

Ms Harrison says she measures the amount of "empty cartons" on the floor rather than unit prices, because they are always falling.

"The price will drop on a product that's going to be replaced, or if a new model's out then you'll find the supplier will drop their price so that can be passed on to our customer."

Mr Bell says the natural "product lifecycle" is shortening because of rapid advances in technology – and pricing has to follow.

"The VCR took 15 years to go through its lifecycle, but when you look now at DVD players and how quickly they went through their cycle, and now we're onto BluRay players – it's huge speed."

But some of that technology, such as 3-D sets and internet-enabled TVs, have helped to stabilise prices this year.

- © Fairfax NZ News