New York — Consumers tightened their purse strings last month amid heightened economic concerns, leading to soft sales at the nation’s largest discount chains.
At Wal-Mart’s flagship discount stores, net sales for the five-week period ending Oct. 5 rose 6.4 percent to $21.5 billion, although comp-store sales edged up only 0.8 percent.
Wal-Mart said company research confirmed that consumers remain concerned about their finances, especially the cost of living, prompting the company to continue reinforcing its price leadership message. To that end, Wal-Mart launched a national brand advertising campaign last month with the new tagline “Save money. Live better,” and this month jump-started the holiday selling season with its first round of price promotions, on toys.
Wal-Mart expects only modest improvements this month, with Tom Schoewe, Wal-Mart’s executive VP and chief financial officer, projecting comp-store sales to range from flat to plus 2 percent.
At No. 2 discount chain Target, net sales for the five-week period ending Sept. 30 rose 6.2 percent to $5.2 billion while comp-store sales increased 1.2 percent. Chairman/CEO Bob Ulrich said comp sales were below plan, and that larger transaction sizes were offset by slower traffic. Consumer electronics was among Target’s strongest category performers last month while entertainment was among the weakest.
Within the warehouse club channel, category leader Costco said net sales for the five weeks ending Oct. 7 rose 9 percent to $5.5 billion while comp sales at U.S. stores increased 4 percent. At Wal-Mart’s Sam’s Club division, net sales for the five weeks ending Oct. 5 rose 6.8 percent to $4.1 billion and same-store sales increased 4.4 percent on strength in CE and video games.
No. 3 warehouse club BJ’s said net sales rose 8.6 percent to $798.9 million for the five weeks ending Oct. 6 while comp sales grew 3.9 percent. TVs were among the company’s strongest sales performers for the month while prerecorded video led the laggards.
Elsewhere, novelty A/V chain Sharper Image said net sales declined 39 percent for the full month of September to $19.6 million while same-store sales slid 21 percent. The company attributed the downturn to a significant decrease in its core air purification business and the discontinuation last year of infomercials, which contributed $3.5 million to the year-ago sales results.
