CE Sales Boost Chain Stores, Best Buy In Dec.
By Alan Wolf -- TWICE, 1/18/2010
LAS VEGAS — Holiday purchases of consumer electronics helped national chains post higher-than-expected sales in December.
At Best Buy, strong sales of notebook computers, mobile phones, major appliances and a surge in online orders boosted Best Buy's net domestic revenue 13 percent to $6.7 billion in December, and comp-store sales soared 9.3 percent.
Although the figures lapped a dismal December 2008, they outpaced the broad retail marketplace and exceeded the 0.8 percent decline in CE holiday sales tracked by The NPD Group (see story, p.16).
Comp sales for the company's home-office category, which includes notebooks and mobile phones, rose 28.5 percent thanks to a broad assortment and differentiated customer experience, Best Buy said.
The company's core consumer electronics category posted a 4.5 percent comp-store increase, which Best Buy attributed to an “industry-leading assortment of televisions.”
Comp sales were flat for the services category, and comp sales of entertainment software slipped 0.6 percent as continued declines in music and movies more than offset an increase in gaming.
Also driving December sales was a 34 percent increase in online revenue, driven primarily by growth in Web site traffic, Best Buy said.
Best Buy believes it continued to gain market share in December, and said its share gains accelerated during the fiscal quarter ending Nov. 30, 2009.
Total company revenue increased 13 percent to $8.5 billion for the five-week period, ended Jan. 2, and company-wide comps increased 8.2 percent, aided by new overseas stores and favorable foreign currency exchange rates.
At Target, net December sales rose 5 percent to $9.7 billion and comp-store sales increased 1.8 percent. CEO Gregg Steinhafel attributed the gains to “stronger-than-anticipated traffic throughout the month, which drove sales growth in a broad array of categories” including CE. Based on last month's performance, the company is projecting higher-than-expected fourth-quarter profit for its retail business.
Sears Holdings reported a 0.4 percent increase in comp-store sales in December, comprised of a 4.3 percent decline at Sears and a 5.3 percent increase at Kmart.
The company attributed the decline at Sears to weaker sales of “higher ticket hardline items,” and credited Kmart's gain to strong sales of apparel and toys.
Sears is projecting net income of between $385 million and $465 million for the fourth-quarter ended Jan. 30.
Within the warehouse club channel, Costco said net sales rose 11 percent in December to $8.3 billion and U.S. same-store sales edged up 2 percent, excluding the positive impact of higher gasoline prices.
Comp sales within the company's combined CE and majaps business rose by the mid-single digits, although price deflation in TVs led to an equivalent decline in category sales despite a 15-percent spike in unit volume. Costco cited computers and audio among its strongest CE sales performers.
At BJ's Wholesale Club, net sales rose 9.4 percent last month to $1.2 billion, and same-store sales increased 2.7 percent excluding gasoline. CE and video games were among the company's strongest-performing categories, although TVs, video software and camera accessories experienced the steepest sales declines.
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