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Sales of DVDs, CDs and video games plunged by almost a fifth in the three months to the end of June, as consumers ditch physical products for online streaming.
Specialist retailers including HMV and Game, as well as major supermarket chains Tesco, Asda and Sainsbury’s – big sellers of physical entertainment products – bore the brunt of the £50m year-on-year fall in quarterly sales as Amazon increased its market dominance.
Total sales of physical entertainment products fell by 19% year-on-year from £263.9m to £214m in the second quarter, according to market research firm Kantar.
Struggling HMV, which has shut 27 stores this year, suffered the biggest fall in market share from 17.7% to 14.4%. Game fell from 8.1% to 7.6%.
The market share at Tesco, which has just announced 4,500 job cuts, fell from 10.3% to 8.3% year on year. Asda and Sainsbury’s both recorded a fall in their market share fall from 7.3% to 6.3%. Morrison’s was the only major supermarket chain to post a share rise, albeit just 0.3% to 3.3%.
However, while the high street struggles, Amazon’s sales are booming. Amazon now accounts for one in every four pounds spent on physical entertainment products by UK shoppers. In the same quarter last year the US giant accounted for 22% of spend.
Fellow US giant eBay has also significantly increased its market share, from 4% to 5.8% year-on-year.
“Amazon and eBay are increasingly popular with shoppers wanting to get the latest release without leaving their homes, particularly if a traditional retailer has disappeared from their local high street,” said Claire McClelland, consumer specialist at Kantar.
In the video market, primarily DVDs, sales plunged 28% – about £31m – from £111.5m to £80.7m. Kantar said the tough comparison against blockbuster sales of hit film The Greatest Showman were to blame for £22m of the fall.
“There’s a lot of competition out there for DVD retailers, particularly in the form of online streaming services,” said McClelland. “No longer just for young people, older generations are becoming increasingly tech-savvy and more confident at using these platforms and they are buying DVDs less often as a result.”
Sales of CDs fell 11% in the quarter from £80m to £71m, partly due to a lack of “big name” music releases and exacerbated by the HMV store closures. Video game sales fell 14% to £62m.
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