Electricals will grow faster than any other major UK retail sector over the next five years, according to analyst Verdict Research.
With growth of 24.1 per cent, electricals will easily outperform total retail growth of 15.1 per cent and other sectors such as homewares (20.2 per cent) and furniture and floorcoverings (12 per cent).
Makers have built a steady pipeline of new technology that has helped maintain consumer interest in the sector but also increased deflation, which is worse than in any other major retail sector.
Its fast growth has also attracted general retailers, increasing competition and raising pressure on specialists.
In its report UK Retail Fut­ures 2011: Elec­tricals, Verdict predicted that specialists’ sales growth over the next five years will be well below general sector growth of 24.1 per cent, at 19.1 per cent.
And, while the big names in electricals are expected to remain dominant – DSGi and Kesa are likely to remain numbers one and two in the market with Argos in third place and closing on Kesa – others will suffer, predicted Verdict, not just from the spread of non-specialists into electricals but also by the growth in online retailers.
The biggest growth category will be brown goods, which is expected to grow by 30.1 per cent by 2011. Games consoles will bear a significant share of the responsibility for this growth, as will flat-panel TVs. Next-generation DVD and HD camcorders will also lend a helping hand.
The next five years will be less good for white goods, which are expected to under-perform.
In a second report, UK Re­­­­­­tail Trends 2007, Verdict pointed out that a transactional website is essential. “Online shoppers spend more, shop more frequently and are much more open to impulse buys than high street shoppers,” said Verdict.