Walmart Sees Anemic Start To Holiday Shopping Season, Despite Steep Discounting

Discussion in 'Wall St. News' started by ByLoSellHi, Nov 25, 2006.

  1. Wal - Mart Sees Weak Sales as Holiday Season Starts

    Published: November 25, 2006

    Filed at 10:51 a.m. ET

    CHICAGO ( Reuters) - Wal-Mart Stores Inc. (WMT.N) predicted a rare decline in monthly sales on Saturday, even as U.S. bargain-hunters jammed stores in search of gifts at the start of the crucial holiday shopping season.

    Wal-Mart, the world's biggest retailer, sounded a cautious note for retailers as they began a second day of Thanksgiving weekend sales with deep discounts and early bird specials on items ranging from cashmere sweaters to plasma televisions.

    Wal-Mart estimated that November sales fell 0.1 percent at its U.S. stores open at least a year -- a closely watched retail measure known as same-store sales.

    The retailer will provide a final monthly sales report on Thursday, when most other major chain stores report their November figures. This would mark Wal-Mart's first monthly same-store sales decline since April 1996.

    Wal-Mart had expected same-store sales to be flat compared with the same period last year, which many Wall Street analysts had viewed as disappointing. Wal-Mart's four-week November sales period ended on Friday.

    ``We would frankly have expected better,'' Merrill Lynch retail sector analyst Virginia Genereux wrote in a note to clients dated Friday, noting that early price markdowns and expansion of Wal-Mart's widely publicized $4 generic drug program should have drawn more shoppers.

    Investors are watching holiday sales particularly closely this year to gauge how consumers are coping with a slowdown in the housing market that has already hurt home improvement retailers and furniture stores.

    Consumer spending accounts for some two-thirds of U.S. economic activity, and the November-December holiday season makes up anywhere from 20 percent to 40 percent of retailers' annual sales.

    The National Retail Federation trade group expects holiday sales growth of about 5 percent, which would be a slowdown from last year's surprisingly strong 6.1 percent gain.


    Wal-Mart began cutting prices on some popular toys and other holiday items as early as October. The retailer is eager to revive growth after back-to-back months of disappointing sales in September and October, but Saturday's report suggested that the early discounts were not enough to reverse the poor sales trend.

    A Wal-Mart spokeswoman declined to comment on Black Friday sales trends, but said the retailer will provide those details along with its sales report on Thursday.

    Stores were packed on Friday, the traditional start to the holiday shopping season, and retailers were pushing another round of discounts on Saturday to keep shoppers coming back. The NRF trade
  2. The Haves and the Have Nots. High-end retailers should have double-digit sales gains. Electronics-oriented retailers should have upper-single-digit sales gains. "Value Oriented" big-box retailers will struggle to compete if they have to reduce prices too quickly.
  3. S2007S


    i saw some of these deep discounted items like a DVD player for 35 bucks...too funny. Who doesnt own a DVD player in 2006. The funny thing is DVDs are on there way out as sites like put blockbuster and netflix to sleep. And people still pay 20 bucks for a DVD they will watch once...
  4. Buying DVD's makes sense for a family because it's cheaper than going to a theater......and you don't have to put up with krapp from rude people.