As we close the books on Holiday 2016, credit card processor First Data reports a happy ending to the season for tech and appliance retailers.
Based on a study of point-of-sale activity at 942,155 merchants last quarter, the payment solutions provider said sell-through for CE and majap dealers rose 8.5 percent for the holiday period (Oct. 29-Jan. 2), compared to the prior year’s 2.2 percent decline.
Indeed, the CE/majap specialty channel was second only to home improvement segment, which rose 10.7 percent over the holidays. However, average ticket for CE and majaps across the entire holiday season was essentially flat from 2015 at $123.59.
Not surprisingly, First Data also found that sales for CE and appliance dealers spiked over the Thanksgiving through Cyber Monday cycle, with brick-and-mortar sales up 16.1 percent year over year, and online sales up 15.8 percent for the five-day period.
By comparison, total retail spending increased 3.6 percent over the previous holiday season, reflecting a 1.6 percent increase in brick-and-mortar sales and a 12 percent spike in e-commerce purchases. What’s more, 21.3 percent of all holiday spending was conducted online, up from the channel’s 15.4 percent share the year prior.
But things were less rosy for Target and hhgregg. The No. 2 discount chain said weak store performance and a slow start to the holiday season led to a 4.9 percent decline in total sales during the critical November and December period.
Target’s same-store sales slipped more than 3 percent for the two months, while combined in-store and online CE comps cratered, falling by the high single digits.
Chairman/CEO Brian Cornell said holiday performance was softer than expected, and pointed to “disappointing traffic and sales trends in our stores,” where same-store transactions declined 1.7 percent.
In contrast, online performance outpaced the industry, Cornell said, with comps and transactions growing more than 30 percent, and sales up more than 40 percent in December.
Meanwhile, hhgregg said the decision to stay above the promotional fray, plus a poorly-timed transition to a new distribution center, sent its holiday-quarter comp-store sales skidding some 22 percent.
For its fiscal third-quarter ended Dec. 31, 2016, the 220-store appliance, CE and furniture chain said net sales fell 24 percent, to $453 million, which led to a net loss of $58.3 million, compared with a prior-year net loss of $26.9 million.
President/CEO Robert Riesbeck laid the blame in part on CE, which was “very competitive again this season” and represented a larger mix of hhgregg’s holiday business.
“We made the strategic decision to compete less in this category, particularly at the entry-level price points,” he said.
CE comps fell 39 percent, compared to a 9 percent decline for home products and a 4 percent slip for majaps. But going forward the company will resume its focus on the appliance and home furnishings categories, and will continue to reposition its CE business toward premium models, Riesbeck said.
