Page last updated at 23:59 GMT, Thursday, 12 February 2009

The recession's unexpected winners

By Anthony Reuben
Business reporter, BBC News

There has been a great deal of doom and gloom about the state of the High Street in the current recession, but there have been a few unexpected winners.

Graph showing sales of TVs and low-energy light bulbs and mobile messaging

Sales of flat-screen televisions have remained strong as the economy has slid, with 10.7% more of them sold in the last three months of 2008 compared with the same quarter of 2007, according to figures prepared for BBC News by GfK retail and technology.

Preliminary figures for January suggest that they continued to be strong in the sales.

"It's going to be a tough year, there's no question of that," says Nick Simon, an expert on consumer electronics from GfK.

"But in the first months of the year we know, in television at least, there has been a very strong performance."

A lot of the growth in sales may be put down to hefty discounting. In December, when the number of televisions sold grew by 17.7%, the value of those sales was up only 0.6%.

The average price of a plasma television in 2007 was 1,037. In 2008 it was 856. The average price of an LCD set fell from 466 to 399.

The surprising thing is that there has been much talk about the risk of deflation, which is that when prices are falling, consumers delay their purchases because they expect them to fall further.

Man watching flat-screen televisions in a shop
2007 2008
Plasma TV 1,037 856
LCD 466 399

Yet in the case of flat-screen televisions, that clearly has not happened.

"They've already come down quite a long way so I don't think people are necessarily going to be sitting around thinking 'we'll leave it another year and they'll go down even further' because there's going to come a point where they can't go any further down," Mr Simon says.

Indeed, it is possible that the price of flat-screen televisions will rise significantly as a result of the weakness of the pound, which makes most imported products more expensive.

"We are working with our suppliers to try to limit the impact of Sterling's weakening over the last 12 months," says Tom Athron, head of electricals and home technology for John Lewis.

"We would expect to see inevitably some pressure on pricing over the course of the next 12 months."

Light bulbs

Another product that has been extremely strong is energy-saving light bulbs, which will provide some cheer for people still depressed by the fall in sales of organic food, reported earlier in this series.

Our series looks at how the economy can be tracked by day-to-day consumption
We have already looked at groceries
We have also looked at transport spending

In the last three months of 2008, 12.3 million of them were sold in the UK, up from 8.9 million in the same quarter of 2007, an increase of 38.2%.

A lot of the increase may be attributed to the falling price of the bulbs, with average prices down from 1.61 each in 2007 to 1.14 last year.

But as a product commonly available in DIY shops, it is in stark contrast to the rest of its sector.

Sales of emulsion paint are taken as a key indicator both of the state of the DIY market and the state of the housing market.

"The demand over the last 18 months has dropped off, primarily because the housing market, which is the largest driver for DIY, has ground to a halt," says Daniel Fearnley, GfK's paint expert.

"As people leave a home they tidy it up to ensure a quick sale and when they move in they want to change the property to their own taste."

In December, 7,433,400 litres of emulsion paint were sold in the UK, down 5.8% from December 2007, according to GfK.

Staying in touch

Another figure staying ahead in spite of the recession is the number of messages we are sending each other on mobile phones.

In the last three months of 2008, the number of text messages sent in the UK rose 32.2% compared with the same quarter of 2007, according to the industry group the Mobile Data Association (MDA).

Picture and video messages, known as MMS messaging, also grew strongly, up 10.7%.

"I think you could describe the usage of text messaging and MMS as a recession-busting technology," says Steve Reynolds, chairman of the MDA.

He attributes the growth partly to operators coming up with attractive tariffs for messaging and also to cost-consciousness.

"People want to continue conversing using text messages and they're in control of their costs if they use text messages."

Mr Reynolds says the rise in messages comes despite falling sales of handsets over the past six months, and predicts that handset sales will continue to fall in 2009.

There are no reliable, up-to-date figures showing what has happened to voice calls, although there are some indications in the results of mobile operators.

Vodafone, for example, says that in the last three months of 2008 it had seen an, "incremental voice revenue decline resulting from lower voice usage in the prepaid segment".

Looking at rising sales of flat-screen televisions, low-energy light bulbs and mobile messaging, it is tempting to conclude that regardless of the state of the economy, people in the UK cannot resist a bargain or an attractive tariff.

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