Discounters’ Sales Slumped In May
By Alan Wolf -- TWICE, 6/4/2009
New York — Tough year-ago comparisons, the absence of 2008’s federal stimulus checks, and lower prices for TVs and gasoline took a toll on May sales at Target, Costco and BJ’s.
Target said net retail sales slipped 2.3 percent to $4.5 billion for the month due to a smaller average transaction size and a same-store sales decline of 6.1 percent. Chairman, president and CEO Gregg Steinhafel described the results as “somewhat below our expectations.”
Non-discretionary categories like food were among the month’s strongest performers, the discounter said, and music, movies and books were among the weakest. By geography, sales were weakest in the southern and mountain states.
Among the wholesale clubs, Costco said net sales sank 5 percent to $5.5 billion last month and same-store sales fell 6 percent due to the negative impact of gasoline deflation. Excluding fuel, same-store sales slipped 1 percent.
Costco said it enjoyed strong unit sales within its catchall “majors” category, which includes TV, audio, PCs and other electronics in addition to major appliances, although comparable store sales slightly declined due to a 39 percent drop in the average selling price of TVs year over year. As a result, TV dollar sales fell 4 percent in May despite a 48 percent increase in unit volume.
At BJ’s, net sales fell 4.7 percent in May to $783.4 million and same-store sales declined 6.8 percent due to lower fuel prices. Excluding the impact of gasoline, same-store sales rose 4 percent.
“Our merchandise comparable club sales increase of 4 percent was a good result in this economy, although it was slightly below our guidance,” said recently appointed president/CEO Laura Sen.
Sen attributed the gains to a 5 percent increase in traffic year over year, and continued strength in TVs and PCs, among other categories, Weaker performing products included prerecorded video and other CE merchandise.
Absent from the monthly sales tallies were Wal-Mart and Sam’s Club, which will provide only quarterly sales updates under Wal-Mart Stores’ new reporting policy.
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