Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Mitch Kaiser – Piper Jaffray.
Mitch Kaiser – Piper Jaffray
I’m just curious you mentioned what you thought the price compression was for 2007 on TVs could you give us a sense for what your current thinking is for 2009. What we’re hearing is kind of that supply remains very tight and that price compression might even be a little less than that 20% this year relative to the 20% in 2007.
Dennis May
We anticipate pricing compression for the upcoming year to be less than 2007 levels. That has, depending on which industry number you pick out; there are various metrics out there. Everything that we have seen, whether it be from CEA or MPD or display search indicates that it’s a less of a level in 2008 than in 2007, although 2007 was a pretty good number. One point of clarity around that, when we talk about pricing compression we’re talking about saying like for like models. ASPs, average selling price for the video industry was actually up in 2007 over 2006 and is expected to be up in 2008 over 2007.
Mitch Kaiser – Piper Jaffray
You’ve made a point about the mix and obviously appliances mix up as a percent of sales in the first half of the year. I think you’re calling out that appliances will probably be weak relative to video is that an accurate assessment?
Dennis May
That is correct. We see the consumer electronics business being stronger for us relative to the appliance business.
Mitch Kaiser – Piper Jaffray
In terms of the Florida stores could you comment on how they did relative to expectations?
Dennis May
We’re very pleased with their performance, very much in line with our expectations. Obviously we’ve just recently opened there but we’ve gotten out of the gate very well.
Mitch Kaiser – Piper Jaffray
On new store productivity what’s a number that we should be using for 2009?
Dennis May
I don’t know that we necessarily break out a productivity number. What we would say there is we are pleased with the results. They mature very quickly. What we said publicly in the past is they come out of the gate with 90% to 95% productivity.
Operator
Your next question comes from Brian Nagel – UBS.
Brian Nagel – UBS
With respect to the gross margin, I saw the decline here in Q4. Can you help us understand better is that a function of mix shift, what there any increased promotion activity or just general trend in the business. The second question I have, we’re now a little more than a couple months into your first quarter, any comments on how sales are tracking so far here in ’08?
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