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PC inventory builds in UK channel as Q1 sales collapse

Microscope contributor

The UK PC supply chain is at risk of being "choked", according to market watcher Context, with weak first quarter sales compounding an inventory glut that emerged over the Christmas period.

Shipments through distribution fell 7.7% in the period, dramatically weaker than the 2.9% average posted across Europe, and the blame lies squarely with falling consumer demand, a sector that accounts for 40% of UK sales.

"Our numbers show that consumer-oriented PC sales across Europe fell 16.5% in the first quarter of the year, but the UK is far more dependent on consumer demand and here sales fell 27.5%," said Context CEO Jeremy Davies.

The UK business segment was comparatively stronger with sales declining just 6% as the corporate refresh cycle continued.

On the vendor front, HP sales were flat though it still accounted for more than one in three branded PCs sold in the UK, while arch rival Acer, which has much greater dependence on the retail space, saw sales decline 4.5%,

South Korean giant Samsung saw shipments fall 40.3%, largely due to the 43.7% collapse of the netbook space, but unit sales from other Asian rivals Toshiba and Lenovo grew 8.3% and 37.5% respectively.

The short-term outlook for the PC market is challenging as the small mountain of inventory that the channel has been unable to clear since the slow fourth quarter continues to build.

"With people buying fewer PCs than previously, the supply chain will be choked and there will be many distributors and retailers trying to get rid of excess stock in the months to come," said Context boss Davies.

Related Topics: Desktop PCs, VIEW ALL TOPICS

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