MINNEAPOLIS – Last Monday night, nearly a dozen people crowded into the living room of Dana and John Pollard in St. Paul Park to watch the Minnesota Vikings defeat the Washington Redskins.

The highlight of the event wasn’t the football game, but the 40-inch flat-panel TV the couple recently bought at Ultimate Electronics for $1,500.

“We consider ourselves pretty low-tech people, but in this case we couldn’t resist,” said Dana Pollard, 31, a financial consultant.

Three years ago, big, thin televisions such as the one in the Pollards’ living room were considered to be out of reach for many middle-class families. This spring and summer, however, prices for many 30-inch flat-panel models dipped below $1,000 – as low as they’ve ever been. The average price for a 40-inch model has fallen 33 percent, to $2,305, from $3,447 a year ago, according to NPD Group, a market research firm.

But lower prices don’t fully explain why the Consumer Electronics Association expects sales of flat-panel TVs to top $7.3 billion this year, up 85 percent from a year ago. After all, $1,500 is still a lot to spend for a television, especially at a time when high fuel prices and rising interest rates have been eating away at households’ disposable incomes.

Retail analysts say the sharp rise in flat-panel sales may have more to do with family living habits than with prices. With the cost of travel, restaurants and movies going up, people have decided that a flat-panel TV is one luxury they can afford.

“Even though it’s still a significant expense, a flat-panel TV can be seen as an investment because it’s for the whole family, and it means they can cut down on other forms of discretionary spending,” said Ross Rubin, director of industry analysis at NPD Group.

Of course, it helps that retailers are marketing the high-end sets like never before. At the Costco store in St. Louis Park, Minn., flat-panel TVs are nearly impossible to miss: More than 30 of them are on wooden pallets less than 50 feet from the entrance.

Within the past two months, Ultimate Electronics removed all its flat-panel TVs from its shelves and mounted them on store walls instead, so that customers could have a better sense of how they would look in their homes. The retailer also puts a monstrous, 65-inch flat-panel set at the front of each store. Though relatively few shoppers can afford its $15,000 price tag, Ultimate Electronics hopes that the sheer size of the display will help entice people into buying larger sets.

Seeing equals selling “If people aren’t exposed to the larger product, they’ll settle for the smaller one,” said Jim Pearse, senior vice president of merchandising at Ultimate Electronics, which is based in Thornton, Colo.

But perhaps no retailer is pushing flat-panel TVs as aggressively as Best Buy Co. Inc., the Richfield, Minn.-based electronics chain. To give its customers a better view of the sets, the giant retailer is widening its aisles and displaying high-definition sets side-by-side with standard ones so shoppers can compare picture quality.

Best Buy Chief Executive Brad Anderson boasts about the two 50-inch flat-panel sets he bought for his home.

“The kind of TVs we’re selling today would have been in a science-fiction movie 20 years ago,” Anderson said during an interview.

But the marketing push had little to do with the Pollards’ decision to buy a new TV. The couple simply found they were spending more time at home since the birth of their son, Lincoln, two years ago. Toss in higher gas prices and the expense of a baby sitter, and going out for a movie or a meal becomes difficult to justify.

“Five years ago, I never would have made a purchase like this,” Dana Pollard said. “It would have seemed ridiculous. But our lifestyle has changed.”

Others have been drawn in by the sleek design of the sets, which intrude less on a room’s design and aesthetics than the big-screen TVs of just a few years ago.

Mark Frank, a real estate agent from Minneapolis, was eyeing a row of flat-panel sets last week in Costco, debating whether to swap the 37-inch flat-panel that cost him $1,200 eight months ago for a 40-inch one priced at $2,000.

“I like the fact that I can put this in my living room but it won’t be the only thing people see when they walk into my house,” he said.

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(c)2006 Star Tribune (Minneapolis)

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PHOTO (from MCT Photo Service, 202-383-6099): CPT-FLATSCREENS

AP-NY-09-20-06 0609EDT