By MATT RICHTEL
Published: November 28, 2008
SAN FRANCISCO — In a volatile year that has turned many Americans into armchair economists, here’s an important indicator to watch this holiday shopping season: how many people are lugging home big, flat-screen televisions?
Shoppers comparing TVs on Friday at a Wal-Mart in Secaucus, N.J. Retailers use big discounts on televisions to lure consumers into stores.
The answer matters to more than just TV makers. Just as high-definition sets have become the hearth of the digital home, they are increasingly central to the fortunes of the consumer electronics industry and plenty of retailers.
And there’s reason for serious concern. While retailers are trying to use discounted TVs as a lure for shoppers, many would-be buyers continue to wait, and wait, for a magical price that is low enough to inspire a purchase. Others just have more pressing needs.
“The question is whether I buy a TV or something more important,” said David Lunsford, 62, who visited a Circuit City near here last week to shop for big-screen TVs. He would love to replace his aging rear-projection set, but he worried he needed to save money in case family members hit tough times.
“I’m a stable provider. They may turn to me,” said Mr. Lunsford, who works for the federal government.
Americans are expected to spend $28 billion this year on TVs, making them the largest segment of the $173 billion electronics industry. So far about half of American households have made the jump to flat-panel screens, which started out as status symbols but are on their way to becoming standard household appliances.
More people may choose to upgrade this year because of the national switchover to digital broadcast signals coming Feb. 17. The change, which will mostly affect people who watch over-the-air signals on older sets, has generated a good amount of consumer confusion — which could be good for sales of new sets.
TVs are also a gateway to a host of other products, like Blu-ray discs and their players, surround-sound audio systems, digital video recorders and cables.
All of these factors have led electronics stores like Circuit City and Best Buy and even less specialized chains like Sears, Wal-Mart and Office Depot, to put TVs front and center in their advertising recently, promoting them on the cover of Sunday circulars and on the home pages of Web sites. They are offering discounts — like 42-inch TVs for less than $700 and 32-inch sets for $450 — that come on top of recent steep price declines for the sets.
For the industry, the feeling is that if retailers cannot get TVs to move, the holiday season could be a bleak one indeed. In that sense, the TV market offers a glimpse of the broader tensions this year between wary consumers on the one hand and retailers and manufacturers desperate to spur sales on the other.
“The television becomes a litmus test of the robustness of the American economy,” said Richard Doherty, an electronics industry analyst with the research firm Envisioneering. In Mr. Doherty’s consumer surveys, the early word is mixed; many consumers want a new TV, but they think that if they wait to buy, retailers will drop prices further.
There were signs on Friday that more cuts might be necessary. At two malls outside Portland, Ore., the electronics stores were the only ones that were full of shoppers. But people seemed to be gravitating toward lower-priced items like video games instead of televisions.
Mr. Doherty’s firm tracked stores in New York and California
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