Aug. CE Sales Slump; Outlook Challenging
By Alan Wolf On Sep 13 2010 - 3:01am
— CE sales grew sluggish for some
of the nation’s largest full-line discount chains last
month, mirroring reports and sales projections from
the independent specialty channel.
Among those reporting August sales results, Target
said CE, including video games, music and movies,
was the weakest performer within its hardlines business,
which experienced a high single-digit decline in
Net retail sales rose 3.4 percent in August to $5
billion, while comp-store sales edged up 1.8 percent.
In a statement, Target chairman/CEO Gregg Steinhafel
said the company is pleased with its strong
back-to-school performance and “healthy” traffic
Within the warehouse club channel, Costco said
CE comps ran “slightly negative” in August due to
soft TV sales. TV comps fell by the mid-single digits in
unit and dollar volume, offset by strength in personal
navigation and cellphones. Costco said computer
comps were flat.
The company’s net sales rose 9 percent in August
to $5.9 billion while comp sales at U.S. stores increased
5 percent excluding the positive impact of
higher gasoline prices.
At BJ’s Wholesale Club, net sales rose 4.9 percent
to $794.6 million and comps climbed 2.2 percent excluding
gasoline. The company cited computer hardware
among the month’s strongest performers and
room air and prerecorded video among the weakest.
Looking ahead, September results may not prove
much better based on the cautious outlook of industry
executives. Brand Source CEO Bob Lawrence,
speaking at the group’s national convention last
month, told dealers that the last 60 days were “the
toughest I’ve ever seen,” and that market conditions
will likely remain challenging.
Similarly, Jim Sendrak, electronics division manager
of MEGA Group USA, acknowledged that “business
is certainly tough” and will require dealers to pursue
That message was also echoed by Jim Campbell,
president/CEO of GE Appliances & Lighting, who
predicted “a very, very slow recovery” for the major
appliance business and the overall economy due to
weak job growth and the ailing housing market.
September sales tallies may also be impacted by
Hurricane Earl, which skirted the densely populated
East Coast at the start of the key Labor Day sales
Separately, the Conference Board Consumer Confidence
Index, which had declined in July, improved
moderately in August. The Index now stands at 53.5,
up from 51 in July. The Present Situation Index decreased
to 24.9 from 26.4. The Expectations Index increased to 72.5, from 67.5 last month.
Lynn Franco, The Conference Board Consumer Research
Center director, said in a statement, “Consumers
are about as confident today as they were a year ago (Aug.
Consumers’ expectations improved moderately in August,
but, overall, they remain pessimistic. Those anticipating
an improvement in business conditions over the next six
months increased to 17 percent from 15.8 percent, while
those anticipating conditions will worsen declined to 13.4
percent from 15.3 percent.
The Consumer Electronics Association (CEA) and CNET
Index of Consumer Expectations (ICE) rose in August, but
only by a half-point.
Confidence in consumer electronics fell more than two
points to 79.8, but remains higher over the same period a
The CEA-CNET ICE rose to 157.8 this month. The ICE,
which measures consumer expectations about the broader
economy, is up by half a point over July and down more
than 14 points from this time last year.
“Individuals remain concerned about their own financial
wellbeing,” said Shawn DuBravac, chief economist and research
director for CEA, “but the multi-month slide in consumer
sentiment, which touched all-time lows in the index,
appears to be subsiding.”
Consumer confidence in technology decreased slightly
this month. The CEA-CNET Index of Consumer Technology
Expectations (ICTE), which measures consumer expectations
about technology spending, is down 2.2 points from
July but is still 2.1 percent higher than this time last year.