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May CE Sales Slump At Discount Chains

6/07/2010 12:01:00 AM Eastern
NEW YORK — Target, Costco and BJs reported declines in consumer electronics sales in May.

At Target, net sales rose 3.7 percent to $4.6 billion last month while compstore sales edged up a more modest 1.3 percent, blunted by weak performance in CE. The comps fell “somewhat below our expectations,” said chairman/ CEO Gregg Steinhafel, who forecast continued “volatility in the pace of economic recovery.”

Separately, Target said it began carrying Kindle at all stores nationwide June 6 due to “overwhelmingly positive” customer response to a limited test this spring. Target is the first brick-andmortar retailer to carry Amazon.com’s e-book reader, which it will sell at Amazon’s online price of $259.

Within the warehouse club channel, Costco reported an 11 percent spike in net sales, to $6 billion, and a 5 percent increase in U.S. comps excluding gasoline. However, CE comps fell into negative territory due to softer TV and computer sales, which it attributed in part to fewer coupon promotions. TV revenue declined less than unit volume due to the addition of LED TVs, which carry higher average selling prices, Costco said.

At BJ’s, net sales similarly rose 11.3 percent, to $872 million, and comps increased by 3.5 percent excluding gasoline. The chain reported strength in room air conditioners but also experienced weakness in computers and TVs.
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