Post by Dee on Nov 29, 2004 16:11:02 GMT 1
Article from Hits
SHOPPERS, DISCOUNTS OUT
IN FORCE
Early Data on Big Weekend Is Positive, Though Music’s Often the Bait for Big Boxes
November 29, 2004
The big post-Thanksgiving shopping weekend saw a mighty influx of consumers at the nation’s retail stores and points to a solid holiday season ahead, according to reports.
The National Retail Federation says 133 million shoppers in the U.S. (out of a total population of 291 million) did their patriotic duty over the weekend by cracking their wallets at the country’s various shops to the tune of $22.8 billion.
MasterCard reported weekend transactions were up 9.3% compared to a year ago, while Visa said it saw an increase of 14.3%
But sales at Wal-Mart, the world’s biggest retailer, were surprisingly soft, causing the world’s biggest retailer to trim its sales outlook for November. The chain now says same-store sales for the month are likely to grow by only 0.7% compared to a year ago—down from previous expectations of a 2% to 4% gain, according to the Wall Street Journal.
The strong credit-card receipts coupled with Wal-Mart’s poor showing led some observers to deduce that other retailers were offering discounts sufficient to lure shoppers away from Wal-Mart stores.
“It looks as though some of the higher-end retailers were stealing some market share away from Wal-Mart by offering some pretty good discounts,” one analyst told Reuters.
Such was definitely the case with music, where deep, loss-leader discounts on CDs were available at at least two of the big-box chains, according to a survey of stores conducted by the Hollywood Reporter. Best Buy had U2’s new album, How to Dismantle an Atomic Bomb (Interscope) priced at $7.99, whopping $2.36 under cost—and $3.25 less than Tower’s price of $11.24 and $4 less than Virgin Megastore’s $11.99 price. Not surprisingly, Best Buy quickly sold out of the record.
Target, meanwhile, was blowing out the new Nirvana box set, With the Lights Out (Geffen), selling the $59 list set for $27.99, knocking over $10 off its cost of $38.09. Best Buy had the Nirvana at $39.99, while Tower priced it at $49.99 and Virgin sold it for $44.99.
Meanwhile, sales at record stores were said to be relatively slow, though several retailers attributed the lack of early holiday bustle to the fact that music is considered by many as a last-minute gift option. The industry is struggling to maintain a shrinking 3% growth rate for the year, and will need a robust holiday season to do it.
So far, the big music winner in the early holiday retail push appears to be Apple Computer, which discounted iPods to $228 and reportedly saw brisk weekend sales. Less than a week after Wall Street firm Piper Jaffray raised its price target on Apple to $100 from $52, another brokerage has done the same: Merril Lynch raised its target to $78 from $61, causing Apple’s stock to jump another 6% to $68.25 before the markets opened today.
SHOPPERS, DISCOUNTS OUT
IN FORCE
Early Data on Big Weekend Is Positive, Though Music’s Often the Bait for Big Boxes
November 29, 2004
The big post-Thanksgiving shopping weekend saw a mighty influx of consumers at the nation’s retail stores and points to a solid holiday season ahead, according to reports.
The National Retail Federation says 133 million shoppers in the U.S. (out of a total population of 291 million) did their patriotic duty over the weekend by cracking their wallets at the country’s various shops to the tune of $22.8 billion.
MasterCard reported weekend transactions were up 9.3% compared to a year ago, while Visa said it saw an increase of 14.3%
But sales at Wal-Mart, the world’s biggest retailer, were surprisingly soft, causing the world’s biggest retailer to trim its sales outlook for November. The chain now says same-store sales for the month are likely to grow by only 0.7% compared to a year ago—down from previous expectations of a 2% to 4% gain, according to the Wall Street Journal.
The strong credit-card receipts coupled with Wal-Mart’s poor showing led some observers to deduce that other retailers were offering discounts sufficient to lure shoppers away from Wal-Mart stores.
“It looks as though some of the higher-end retailers were stealing some market share away from Wal-Mart by offering some pretty good discounts,” one analyst told Reuters.
Such was definitely the case with music, where deep, loss-leader discounts on CDs were available at at least two of the big-box chains, according to a survey of stores conducted by the Hollywood Reporter. Best Buy had U2’s new album, How to Dismantle an Atomic Bomb (Interscope) priced at $7.99, whopping $2.36 under cost—and $3.25 less than Tower’s price of $11.24 and $4 less than Virgin Megastore’s $11.99 price. Not surprisingly, Best Buy quickly sold out of the record.
Target, meanwhile, was blowing out the new Nirvana box set, With the Lights Out (Geffen), selling the $59 list set for $27.99, knocking over $10 off its cost of $38.09. Best Buy had the Nirvana at $39.99, while Tower priced it at $49.99 and Virgin sold it for $44.99.
Meanwhile, sales at record stores were said to be relatively slow, though several retailers attributed the lack of early holiday bustle to the fact that music is considered by many as a last-minute gift option. The industry is struggling to maintain a shrinking 3% growth rate for the year, and will need a robust holiday season to do it.
So far, the big music winner in the early holiday retail push appears to be Apple Computer, which discounted iPods to $228 and reportedly saw brisk weekend sales. Less than a week after Wall Street firm Piper Jaffray raised its price target on Apple to $100 from $52, another brokerage has done the same: Merril Lynch raised its target to $78 from $61, causing Apple’s stock to jump another 6% to $68.25 before the markets opened today.