September CE Sales Diverge For Discounters; NRF Projects Modest Holiday

By Alan Wolf On Oct 17 2011 - 4:01am

NEW YORK — September CE sales were a tale of two cities for Target and Costco, although both discounters, as well as Walmart, reported positive same-store sales growth for the month.

Separately, the National Retail Foundation (NRF) projected a slim 2.8 percent increase in holiday sales, but said retailers will make the most of it through steep promotions and lean inventory.

Target said net retail sales rose 6.5 percent to $5.9 billion for the five weeks, ended Oct. 1. Compstore sales increased 5.3 percent despite declines in CE, which dragged the hardlines segment down by the low single digits, the chain reported.

Costco said net sales for the five weeks, ended Oct. 2, increased 15 percent to $8.6 billion, while U.S. same-store sales rose 7 percent excluding the positive impact of higher gasoline prices. Chief financial officer Richard Galanti said CE comps rose by the mid-single digits on unit and dollar volume gains in TV, reversing last quarter’s mid-single digit decline.

BJ’s Wholesale Club, which traditionally reported its monthly sales results, was taken private by an equity investment group on Sept. 30, and its stock was de-listed from the New York Stock Exchange earlier this month.

Walmart, which no longer reports monthly sales results, told analysts at a meeting near its corporate headquarters last week that U.S. comps had risen for three consecutive months since July, marking the first quarterly increase in more than a year.

The retailer also said it will continue to reduce operating expenses and lower prices, will open between 80 and 100 medium- to small-format stores next year, and will add six more mini Express stores this fiscal year, for a total of 11.

Walmart has also doubled its holiday advertising budget and will seek to boost online traffic this season by providing free shipping for apparel and consumables purchases over $45.

Elsewhere, the NRF projected a 2.8 percent increase in total 2011 holiday retail sales, to $465.6 billion. The increase is far lower than the 5.2 percent gain retailers enjoyed last year, but is slightly higher than the 10-year average holiday sales increase of 2.6 percent, the trade group said.

“While businesses remain concerned over the viability of the economic recovery, there is no doubt that the retail industry is in a better position this year to handle consumer uncertainty than it was in 2008 and 2009,” said NRF president/CEO Matthew Shay. “Retailers are optimistic that a combination of strong promotions and lean inventory levels will help them address consumer caution this holiday season.”