Homebodies fuel boob-tube boomlet

On the shopping list for budget-minded consumers: groceries, gas — and a flat-panel TV?

Shelling out hundreds of dollars on a television is hardly wallet-friendly, but LCD and plasma sets have been flying off the shelves all year, with some retailers saying TV sales are better now than they were during the holiday season.

Retail experts say the boob-tube boomlet stems, in part, from dramatic price-slashing by retailers that are trying to undercut the competition and need to move merchandise to make room for newer models. The recent transition by broadcast stations to digital signals also brought out droves of shoppers who used the deadline as motivation to replace their analog TVs.

But there's also a recession twist: Some industry watchers say that people are upgrading their TVs because they're spending more time at home during the economic downturn.

"Consumers are increasingly using the home as a place to look for entertainment," said Riddhi Patel, an analyst at research company iSuppli Corp. "And TV becomes the main medium. ... People are saying instead of taking trips during the summer, they may as well stay at home and buy a TV."

According to iSuppli, shipments of new flat-panel TVs in the U.S. and Canada totaled 7.8 million units in the first three months of the year, an increase of 17.3 percent from the same period last year. The research outfit said that, starting in April, TVs 32 inches and smaller have been in short supply.

Many shoppers are choosing less expensive TV models and value brands, Patel said. Televisions priced at less than $1,000 are doing especially well.

Discount giant Wal-Mart has gained market share as consumers have flocked to lower-priced stores for TVs. In the first three months of the year, iSuppli said, 22.3 percent of U.S. flat-panel purchases were made at Wal-Mart, up from 13.8 percent in the first quarter of 2008.

Tight competition among retailers, both brick-and-mortar and online, has driven prices for some TV sets down sharply. Patel said flat-panel television prices in the first quarter were 23 percent lower on average compared with the same period last year.

The digital TV transition deadline gave retailers a sales bump from consumers who opted to splurge on a new television instead of buying a converter box. Several local electronics stores reported crowds of TV shoppers just before and after the June 12 switch.

With TVs a staple in homes nationwide, industry analysts say they expect flat-panel sales to remain strong even as consumers continue to scrimp on other retail purchases such as apparel and home furnishings.

That might be because many consumers see a TV more as a necessity than a frivolous purchase, said Britt Beemer, chairman of consumer behavior enterprise America's Research Group.

"When you ask consumers what item in the house gives you the most enjoyment," he said, "TVs will always be No. 1."