TVs Face Bigger Fallout From Tariff Price Hikes Than Personal Necessities, NPD Says
Products like TVs and headphones that consumers deem “nice to have,” but not essential, likely will bear the biggest sales fallout from tariff-induced price increases, The NPD Group said in a Sept. 9 research report. Consumer buying decisions “will be impacted less by household income or cost and more by whether a product is considered a 'necessity,'” it said.
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NPD canvassed 2,500 consumers on their post-tariff buying intentions and analyzed point-of-sale data from the past three years, using “time series forecasting models to understand the impact of tariffs on retail sales,” it said. It constructed an index depicting “the relative impact on potential sales as a composite function of how consumers expect to delay purchases or buy less expensive items,” it said. A value of 100 is the average impact across all researched categories, it said. An index of 120 means that a category has a 20 percent “greater potential for sales decline than the average category,” it said. Household necessities generally scored below 100, while consumer tech items scored consistently above it, NPD said.
The average selling price of items in a category “does not predict the consumer-reported potential for sales impact from price increases,” it said. “High- and low-priced items appear in all category groups, regardless of the expected magnitude of the tariff impact. However, higher prices do correlate somewhat with increased odds of delaying a purchase.” Consumer perceptions, not actual pricing, “will determine the effect of tariffs on overall spending and the economy,” NPD said. “Consumers will balance price and value according to their preferences and needs, trading down or delaying inessential purchases.”