How Good Were Holiday Sales Really?

The answer to that question depends upon who you ask.

Speak to ShopperTrak, they will tell you that even though traffic was off, sales increased 4.5%. The firm measures foot traffic in shopping centers and malls via 50,000+ video devices, and adds in U.S. Commerce Department sales
data.

Holiday sales in the U.S. climbed 4.5 percent, ahead
of ShopperTrak RCT Corp.’s forecast, as retailers lured customers with
discounts on clothing and electronics.

The gain exceeded the projection of a 3.6 percent increase,
ShopperTrak said in a statement today. Customer visits dropped 2.7
percent during November and December from a year earlier, the firm
said…

Other analysts and research firms have projected holiday sales may
be the worst in at least five years. The National Retail Federation has
forecast a 4 percent rise, the smallest since 2002."

Speak to two of the country’s biggest retailers, and you get very different numbers: Wal-Mart (WMT) said in early December that sales would rise between 1-3%; Target (TGT) said same-store sales for December may actually show a decline.

At the same time, the FT reported that "American Eagle, the youth clothing chain, and Men’s Wearhouse, which specializes in business suits, both cut their fourth-quarter earnings guidance on Wednesday – presaging what is expected to be a  round of grim December sales figures on Thursday from other leading US retailers."

My take? I suspect the ShopperTrak data has lots of inflation built into to it via the Commerce department.  If we go ex-food and energy to back out inflation, we can get Real sales increases (not nominal inflation gains). Then sales were somewhere between minus 1.5% and plus 1.5%.

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UPDATE: January 10, 2008 9:32am

Yecch:

Retailers Post Weak December Sales

A number of retailers cut expectations, led by Kohl’s Corp., as companies largely posted December same-store-sales figures below already lackluster estimates.

One exception was Wal-Mart Stores
Inc., as the giant posted sales at the higher end of forecasts and
reiterated its fiscal fourth-quarter earnings forecast of 99 cents to
$1.03 a share.

The company posted a 2.4% gain in U.S. same-store
sales, excluding fuel, compared with its 1% to 3% forecast. Wal-Mart
stores reported 2.6% growth amid strength in grocery, pharmacy and
electronics departments. Sam’s Club — long the firm’s better
sales-growth performer — had a 1.3% increase amid "slightly lower"
traffic and weakness in home furnishings.

Target
Corp. posted a 5% drop, double the decline analysts were expecting. The
company warned on Christmas Eve that December same-store sales on a
calendar-adjusted basis might range from down 1% to up 1%; on that
basis sales fell 0.6%. The firm late Wednesday announced that Chief
Executive Robert J. Ulrich will retire May 1 and be succeeded by
President Gregg W. Steinhafel

 

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Sources:
ShopperTrak Says Holiday Retail Sales Climbed 4.5%
Duane D. Stanford
Bloomberg, Jan. 9 2008
http://www.bloomberg.com/apps/news?pid=20601087&sid=aP7GHXxcdatg&

Clothing retailers cut their earnings forecasts
Jonathan Birchall
FT, January 10 2008 01:44
http://www.ft.com/cms/s/0/1d189592-bf19-11dc-8c61-0000779fd2ac.html

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I’ve mentioned the Blu Ray/HD quandry in the past, but it seems the fight is drawing to its conclusion. In both the US and Europe, Blu-ray discs are significantly outselling HD DVDs.

But its this MacRumors chart (below) that pretty much sums up the battle:

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Warner_300

Its hard to see how HD has a shot.

Now the question becomes how fast the prices drop on both the Blu Ray players and movies, but for now, I am sticking with an upconvert Sony for the big TV.


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UPDATE: January 8, 2008 8:21pm

Why would prices go down?

As we previously discussed, I suspect many consumers have been on the sidelines awaiting the winner of the format war between Blu-Ray and HD.

As that fades away, the total number of purchases of the winner — Blu Ray — will go up significantly.

Thus, economies of scale, mass adaptation, and desires for deep market penetration will drive prices lower.

As to the monopoly issue — I doubt its an issue. 1) These are video playback toys, not an essential product or service; and B)  There is still legit competition from ordinary DVD players (fer cryin out loud, you can still buy VCRs for $29).   

My apologies for failing to explain the intermediate steps in my thinking  . . .

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