Wal-Mart Off, Other Chains Okay For Nov.
By Alan Wolf -- TWICE, 12/4/2006
New York — The leading national discounters largely enjoyed solid sales in November, although the largest of them all took a rare revenue drubbing last month.
Hobbled by slower traffic and tough comparisons to the year-ago period, when replacement sales soared in the wake of Hurricane Katrina, Wal-Mart Stores posted its first same-store sales decline in nearly a decade. Comps slipped 0.5 percent, although total sales rose 7.9 percent to $18.8 billion on strength in CE, the company said — which is one of "five key focus areas" for Wal-Mart and a promotional battleground for the holidays.
"Customers appreciate the fact we give them the best prices in electronics. They can afford more of the name brands and technology in electronics for the season," said Eduardo Castro-Wright, president/CEO of Wal-Mart Stores Division U.S., in a rare statement on its CE business. He said Wal-Mart's CE sales were driven by "solid performances" in HDTVs, MP3 players and computers on Black Friday, and "strong sales" throughout November in DVDs, video gaming systems and extended service plans. "We are pleased at the number of customers who are adding product warranties to their electronics purchase," he noted.
Looking ahead, Castro-Wright said supplies of PS3 and Nintendo Wii will continue to be tight, although the retailer has "the appropriate inventory levels in our other electronics product offerings to meet the demand for the rest of the Christmas season." Wal-Mart will also continue to hammer home its low-price message through the balance of the holiday season with additional price cuts and circulars that "communicate price leadership," but is projecting flat to 1 percent growth in same store sales for December.
By contrast, Target said November net sales rose 11.7 percent to $5.1 billion while same store sales increased 5.9 percent thanks to increases in traffic and average ticket. The company cited CE among the month's strongest sales performers, as was evidenced by jammed departments on Black Friday and brisk demand for its private label Trutech 19W-inch LCD TV for $179.
Among the wholesale clubs, Costco said companywide sales increased 9 percent in November to $4.8 billion while U.S. same store sales rose 4 percent on continued strength in A/V, computers and white goods. Net sales at Wal-Mart's Sam's Club division edged up 2.1 percent to $3.3 billion and comp sales increased 2 percent, while BJ's reported a 4.9 percent increase in net sales to $652.5 million and a 0.6 percent gain in same store sales. BJ's said traffic and average transaction were both up 1 percent year-over-year, and included TV and electronics among its strongest comp sale gainers.
Elsewhere, executive CE gift chain Sharper Image continued to lose ground, with both comp store and total company sales falling 27 percent in November, the latter to $46.8 million.
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