Argos has grown its share of the physical entertainment market as sales in the overall sector declined in a “tough” run-up to Christmas.
Sales of physical entertainment products, including CDs, DVDs and computer games, slid 7.8% in the 12 weeks to December 18, according to the latest quarterly figures from Kantar.
The decline equates to more than one million fewer shoppers at a cost of £31m in lost sales.
Of the retailers in the market, Argos made the strongest gains, growing market share by 2.8 percentage points to 9.9%.
This was largely thanks to Argos’s 19.1% share of the games market.
“Having its outlets in Sainsbury’s stores will allow Argos to appeal to a much broader range of consumers among all entertainment markets, particularly in gaming”
Fiona Keenan, Kantar Worldpanel
Kantar Worldpanel strategic insight director Fiona Keenan said: “Having its outlets in Sainsbury’s stores will allow Argos to appeal to a much broader range of consumers among all entertainment markets, particularly in gaming.”
Game and HMV suffered the biggest declines, with Game’s overall market share falling 1.5% to 13.1, and HMV’s dropping 0.7% to 12.5.
Game’s 27.4% share of the gaming market still leads the pack, but is at its lowest level since 2014.
“The increasing competition in gaming has had repercussions for Game. March’s Nintendo Switch launch will be critical for Game if it is to regain its losses but it will continue to face strong competition from Argos”
Fiona Keenan, Kantar Worldpanel
Keenan said: “The increasing competition in gaming has had repercussions for Game.
“March’s Nintendo Switch launch will be critical for Game if it is to regain its losses but it will continue to face strong competition from Argos, currently the number one retailer for Nintendo games.”
Among the supermarkets, which traditionally perform less well in entertainment over the festive period, Tesco and Asda fared best.
In gaming, Tesco’s share of 14.3% was enough to move it ahead of Amazon for the first time since 2012, while Asda made gains in games and video following two years of declining fourth-quarter share.
Physical entertainment
In the sector overall, both music and video sales endured double-digit declines, falling 11% and 12% respectively, while gaming sales were down 2.7%.
“The increasing popularity of digital entertainment products is making it ever more difficult for retailers to maintain the relevance and excitement of giving physical entertainment products as gifts”
Fiona Keenan, Kantar Worldpanel
Keenan said: “The increasing popularity of digital entertainment products is making it ever more difficult for retailers to maintain the relevance and excitement of giving physical entertainment products as gifts, and it’s not been an easy Christmas as a result.
“Gift cards for digital music and video aren’t popular enough to offset this as yet, so it’s vital that retailers think creatively about how to use their stores as a platform to promote online gifting.”
Physical music sales were hampered by the lack of a big-selling album this Christmas.
Keenan said: “The music market needs platinum-selling albums to sustain its performance. This Christmas was the first in five years not to feature an artist album in the top 10 most popular gifts.
“There’s already a lot of hype around Ed Sheeran’s upcoming album release in March, so we can expect a clear boost to the market.”
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