While The Notebook Company expects its sales to be 20% down for the 2009 calendar year, upgrades are expected to increase by as much as 30% – acting to level out the downturn in sales.
This is the word from CEO Christopher Riley, who says: "Thanks to the economic climate there is a lot of uncertainty in the market and even those people, or companies, with money are holding back on purchase decisions. Those who are finding the climate taxing, are, instead, opting for upgrades. So, while our sales are down upgrade sales are doing well – and will increase by at least 30% this year."
Riley says the weakness of the rand against the dollar had also meant that prices had also risen, making it even more difficult for individuals and companies to justify new purchases. With consumer indebtedness at an all-time high of more than 76% to disposable income, consumers are being hit hard from all sides.
"We don't see this situation abating any time soon," he says. "If interest rates are cut aggressively during the year, this will certainly help – but it will not be enough to usher in boom times."