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TV prices to soar in 2009 as a result of the plummeting pound

by Parm Mann on 16 December 2008, 12:30

Tags: Samsung (005935.KS), Sharp (TYO:6753), Sony (NYSE:SNE), Panasonic (TYO:6752)

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Despite current high-street prices dropping dramatically in an effort to entice customers ahead of the Christmas season, retailers may soon face further gloom as Asia's biggest TV manufacturers plan to raise prices.

Sony, one of Japan's leading manufacturers of consumer TVs, has stated that the plummeting value of the pound against the yen has left it unable to maintain current pricing. In a statement regarding forthcoming price increases, it announced last month that "it is likely that the vast majority of products affected will see increases of less than 33 per cent" and added that "Sony does not believe that it will be alone in taking this form of action".

We've already seen the knock-on effect of the fluctuating US dollar take its toll on the cost of PC hardware in the UK, and the unfavourable yen-to-pound exchange rate is expected to have similar consequences in the coming months. But why the sudden change?

Well, at present, it could simply mean that retailers are equipped with ample amounts of stock purchased back when the pound carried weight in value. When those retailers begin to buy new stock at the current exchange rate, they'll find that prices on products such as TVs will have to rise in order to prevent taking a significant hit on margins.

Following on from Sony's announcement, Sharp yesterday announced plans for a 10 per cent price increase and other big-name Asian brands such as Panasonic and Samsung are expected to follow suit.

With a widespread hike being forecast, this Christmas may just be the best time to make a purchase as retailers continue to make prices as attractive as possible.



HEXUS Forums :: 9 Comments

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oh noes - we better all run out and get one now then? ;)
MadduckUK
oh noes - we better all run out and get one now then? ;)

Good idea - all the people bound to be made redundant can at least console themselves with the thought they'll have more time to watch a shiny new TV ;)
Dont we already pay more than Asia/US anyway? Another shabby excuse.
TheBuZZard
Dont we already pay more than Asia/US anyway? Another shabby excuse.

What ever the reasons were before for high prices (high VAT, poor export market etc), the recent drop in the pound was inevitably going to effect highstreet electronics prices sooner or later….probably the only reason its taken longer then computer hardware to increase in price is due to how long it takes to shift stock.
Well, exchange rates would certainly generally make imported goods cost more.

On the other hand, a recession, increasing unemployment, crashing consumer confidence and so on will all lower demand. If suppliers try to increase prices right when demand, worldwide not just here, is falling they're REALLY going to have a problem …. namely, where to store all those increasingly expensive consumer appliances they can no longer sell.

If this recession ends up as bad as it looks like it might, expect to see some big names going out of business, and others getting consolidated. If MFI can go under, and Woolworths can go under, and even GM etc., have to go cap-in-hand (even if the tactless morons went begging via executive jet :rolleyes:) to the taxpayer, there's no reason to suppose the like of Sony are exempt.

Will prices of many goods go up? Yeah, probably. But we are also (IMHO) going to see vicious competition for customers over the next year or two, depending on just how bad things get.

And as for how bad things might get, the Madoff affair is likely to SERIOUSLY not help. That's the equivalent of waiting for someone to collapse in the street with a heart attack, and then ‘helping’ by kicking him in the balls …. with steel toecap boots on. What worries me is whether the Madoff affair is just a (huge) scandal, or just the first of a series of such scandals.