Discount Retailers Mark Dismal Christmas 2008 Sales
January 9th, 2009 at 12:44 am - by admin
An overwhelming number of U.S.-based discount retailers - including monolithic Wal-Mart - paint a less than gloomy look on the 2008 Christmas season’s economic performance.
Wal-Mart projected total Christmas sales in December were up 1.7 per cent, a notable fall from the projection that industry experts had pinned at 2.8 per cent. Wal-Mart’s fourth quarter profit estimates were cut, after this statistical release, to approximately 90 cents per share.
The company has a reputation of exceeding its competitors performance in poor economic seasons, due to its ability to cut prices and appeal to the thriftiness and reduced budget draw of those depressed wallets.
The Gap, a major brand retailer of consumer-grade clothing reported sales of nearly 15 per cent less than they expected for Christmas 2008, while companies like Sears/Kmart reported 7-8 per cent reductions in Christmas sales.
Walgreen, the major drugstore chain also reported increased sales - up to 5 per cent higher than before - along with a plan to cut 1,000 jobs.
After Christmas, we reported that Christmas spending had fallen approximately 4 per cent; and that a retail trade organization expected to report 150,000 stores closing in 2008, with roughly 70,000 more on the brink of collapse.
A number of analysts suggest that this type of Christmas performance is unprecedented, with Christmas being one holiday which seems to resist much of economic decline in contractionary economies.
“The November retail sales environment was an extremely difficult one with the backdrop of the recession and financial crisis still looming large in the economy, with this poor start to the holiday season’s sales—even adjusting for special factors—ICSC Research has trimmed its November-December holiday sales forecast to flat to down one percent. The main special factor in November was a tough comparison from last year with a calendar-shift drag on year-over-year sales, worth between 1.5 and 2.0 percentage points.” was the International Council of Shopping Center’s formal position in November, speaking of a higher sales level in December that was never to arrive.
