The crisis in the global consumer electronics business is deepening after warnings and results overnight from Panasonic, the Japanese giant, and DSG, the big UK retailer.

Panasonic cut annual profit forecasts by a huge 90% (Sony’s cut was 57% forecast last month) and DSG reported a loss and has dropped its dividend to help save upwards of $A300 million in costs and cash outflows.

Panasonic blamed the slumping sales and the impact of investment on write-downs and restructuring costs. (They follow the sharp falls on the Tokyo stock market in the last eight weeks).

It said it now expected annual profits to total ¥30 billion ($314.7 million), or an incredible 90.3% lower than its earlier forecast of ¥310 billion ($3.3 billion).

Sales of all types of consumer products are plunging; computer chip sales for phones and computers are falling, sales of phones and PCs and laptops are falling; retail sales are down sharply and a growing number of players from all parts of the sector are reporting earnings slumps or losses that show no sign of stabilising.

In fact, after the financial sector and cars, the consumer electronics business looks like being a major casualty of the downturn triggered by the credit crunch.

Once again the culprit is easy to find: the sudden plunge in confidence, sales and spending in the wake of the Lehman Brothers collapse in mid-September.

October retail sales in the US fell 2.8% (a record), car sales were down 32% and sales of cars and other goods were sharply down in Australia and Europe as well. In future years, October will be known as The Black Hole, or The Month That Ate The Global Economy.

Makoto Uenoyama, Panasonic’s finance director, blamed “a fall in sales because of the rapid economic slowdown and lower prices due to fierce competition”.

He’s another senior executive from a global business to name October as the month when things went pear-shaped. European-based global Chemical giant, BASF and its engineering counter part, Siemens were two others to reveal the same experience.

For the likes of Intel, Sony, Panasonic, Harvey Norman, DSG and Best Buy, it’s when the slump became a plunge. For the likes of Circuit City in the US and Woolworths in the UK, it’s when the slump became terminal.

In Britain, Woolworths, which was a big seller of consumer electronics, collapsed this week, putting 30,000 jobs at risk and a rival, DSG, reported a £30 million loss (around $A72 million). It dropped its dividend and revealed other cuts that will total close to £190 million, or over $A400 million in savings. Including restructuring costs, the loss was almost £62 million, or close to $A150 million, a significant figure. It owns the Dixons.co.uk, Currys and PC World chains in Britain and has outlets in Italy and elsewhere in Europe.

In the US, the country’s second biggest retailer, Circuit City, has collapsed and the biggest, Best Buy, has seen sales and profits flop faster than expected.

Falling car sales are also hurting the sector: car companies need fewer chips, electronics pages, DVDs, CD and MP3 players. That was singled out by Panasonic as one of the reasons for its downturn. In Australia it’s the likes of Harvey Norman and Clive Peeters being hit by downturns in demand for consumer products like TVs and DVDs; its sales of those big ticket items like LCD and Plasma TVs (which are actually declining quickly in the face of the LCD onslaught). DVDs are cheap and now slowly becoming redundant.

There are reports that Hollywood and the US DVD industry are forecasting a 7.5% drop in DVD sales, which falls to around 6% if sales of Blu-Ray discs are included. Blu-Ray sales are starting to get traction. Nokia, the phone giant, has cut its forecasts for 2009 for phone sales, and expects phone sales this quarter to be down as well around the world.