Consumers still aren’t buying gadgets.
The latest Commerce Department retail sales data, which showed a disappointing 0.4% fall overall in April from March, includes a 2.8% drop in sales at electronics and appliance stores, which is worse than any other individual category. Sales were down 12% on a year-over-year basis. In March, sales were down 7.8% sequentially for electronics stores, and 8.8% year over year.
As the Wall Street Journal notes, the 0.4% drop was substantially worse than the Street expectations for a 0.1% rise in retail sales over the previous month.
I suspect the year-over-year numbers for the electronics segment were likely hurt by the closing of Circuit City; some of their sales were no doubt absorbed by discount retailers like Wal-Mart (NYSE:WMT) and warehouse club stores like Costco (NASDAQ:COST). But even so, the numbers would appear disappointingly weak given recent commentary from Intel (NASDAQ:INTC), Nokia (NYSE:NOK) and others asserting that demand for PCs, handsets and other goods had likely bottomed in Q1.