Latest Holiday Sales a Lump of Coal for Retailers

greenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

Latest Holiday Sales a Lump of Coal for Retailers

Monday, December 11, 2000

By Anna Driver

CHICAGO (Reuters) - Santa Claus delivered U.S. retailers another round of disappointing holiday results in the latest week as a slowing economy continued to put a damper on the season's sales and procrastinating shoppers put off purchases.

Consumers, mindful of higher interest rates and a spike in fuel costs, have cut budgets this year. Also, Dec. 25 falls on a Monday, allowing shoppers a full weekend of last-minute gift buying.

"While the expectations were relatively modest," Lazard LLC retail industry analyst Mark Picard said on Monday, "it seems that the later season is possibly causing consumers to take a 'wait and see' approach to buying in hopes that maybe they can do better on pricing, or maybe they are just choosing to wait."

Wal-Mart Stores Inc., the world's largest retailer, said customer traffic was sluggish and sales at its stores in the week ended Friday came in below company forecasts.

The results mark the second week in a row that sales for the Bentonville, Ark., company have missed its expectations. Most retailers have seen shopping traffic fall off considerably since a burst of activity over the Thanksgiving holiday weekend in November.

No. 2 retailer Sears, Roebuck and Co. also said its same-store sales for the latest week came in below company forecasts for growth of 1 to 3 percent. Sales were strongest for home appliances and items like tools, The Hoffman Estates, Ill., company said.

Shares of Wal-Mart were off $3, or 5.5 percent, at $51-7/16 in afternoon trade on the New York Stock Exchange. Sears was down 26 cents at $34.85.

Federated Department Stores Inc., parent of Macy's and Bloomingdale's Department stores, noted that sales slowed in the last week, but the Cincinnati company still expects to meet its forecast for same-store sales growth of 3 percent in December.

"As we suspected could happen, customers appeared to slow down their shopping in the second week of December," Federated said in a recording for investors, "and as a result, sales this past week were disappointing."

Federated shares fell 3/16 to $33-1/16 in afternoon trade on the New York Stock Exchange. The stock has a 52-week low of $21 and a year high of $53-7/8.

Prospects for this week don't look much better following a blast of wintry weather that hit the middle of the country on Monday. The season's first major snowstorm brought blizzard conditions to the nation's midsection as well as the possibility of a slowdown in mall traffic.

But Lazard's Picard said snow is a boon for some retailers.

"You see some businesses that sell shovels and snow blowers and the clubs -- where people stock up on things -- have historically done OK with snow," he said.

http://news.lycos.com/headlines/TopNews/article.asp?docid=RTNEWS-SALES-HOLIDAY-DC&date=20001211

-- Martin Thompson (mthom1927@aol.com), December 11, 2000


Moderation questions? read the FAQ