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Discount Chains Report Feb. Sales Gains

3/10/2010 06:28:00 AM Eastern

NEW YORK — National discount
chains reported strong sales increases for
February despite lackluster TV demand
and the impact of severe winter weather
across much of the country.

The weakness in TV was surprising given
this year’s later start for the Super Bowl
and easy year-over-year comparisons.

Among those reporting monthly sales,
Target said retail revenue rose 6 percent in
February to $4.6 billion and comp-store
sales “modestly” exceeded expectations by
edging up 2.4 percent, although sales of
hardlines, which includes CE, were flat.

In a statement, chairman, president
and CEO Gregg Steinhafel said, “We
continue to experience year-over-year increases
in guest traffi c in our stores, reflecting the relevance of our strategy and
assortment in combination with a slowly
recovering economic environment.”

Within the wholesale club channel,
Costco said net sales rose 11 percent in
February to $5.6 billion, while comp-store
sales rose 2 percent in the U.S., excluding
the positive impact of gasoline sales.

In a conference call, Costco chief financial
officer Richard Galanti said unit
sales of TVs were “down very slightly” in
February, and that dollar volume was off
by “a little more than that,” although category
price compression had eased to less
than 5 percent.

Galanti attributed the comp-sale decline
to tough comparisons with past
years, when Costco had enjoyed TV unit
sales increases of 30 percent to 50 percent.
He also cited tight TV supplies due to increased
demand in Europe and especially
China, where TV sales exceeded those in
the U.S. for the first time last month.

At BJ’s Wholesale Club, February net
sales rose 12.8 percent to $755.2 million
and comp sales increased 3.9 percent, excluding
fuel. The chain said TVs and prerecorded
DVDs were among the month’s
weakest performers, and that severe winter
storms negatively impacted February
comps by between 2 percent and 2.5
percent. The effect was offset by the later
start date for Super Bowl, which added
about 2 percent in comp gains, BJ’s said.

The reported softness in TVs was at
odds with findings from MasterCard
Advisors, which said retail sales of consumer
electronics rose 5.8 percent in February
over the year-ago period. The increase
followed a 0.4 percent uptick in
January and represents the sixth consecutive
monthly gain in CE sales, the fi nancial
consultancy said, due likely to easy
year-over-year comparisons and tighter
inventory.

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