Tuesday, January 03, 2006
Wal-Mart Watch: Putting the Cheap Chinese Crap in Christmas
- Wal-Mart's Holiday Growth May Be At The Low End Of The Forecast (New York Times)
Wal-Mart which mounted an unprecedented holiday marketing campaign featuring $400 laptops and celebrity-laden television commercials, is on track to post its weakest December sales growth in five years. The discount giant estimated that sales at stores open for at least a year rose 2.2 percent. The results barely landed within the company's forecast of a 2 percent to 4 percent sales increase for the month, and indicated that Wal-Mart had its worst December since 2000, when sales rose 0.3 percent. Wal-Mart, which did not return telephone calls seeking comment on the sales, sought to put a cheery spin on the forecast in its prerecorded weekly sales phone message over the weekend. The message is typically straightforward, but this one included a song, based on the Christmas classic "Up on the Housetop," summarizing the holiday season. The chorus included these lines: "Ho, ho, ho, who wouldn't go? Out to Wal-Mart, let's go shop. Get great deals, watch prices drop." But the closing lyrics offered a hint of the mood at the company, whose stock price has remained stagnant for the past year: "Just buy our stock, don't sell, sell, sell."
- Results Show Wal-Mart's Holiday Wasn't Terribly Cherry (MarketWatch via Investors.com)
The verdict is in. Wal-Mart had a disappointing showing during December as consumers tightened their pocketbooks and waited for deeper discounts -- and gift cards -- before picking up merchandise.
- Wal-Mart Sees Tepid Sales Despite Promotions (Wall Street Journal)
Wal-Mart said general-merchandise sales were stronger than food sales for the week ended Friday. The stronger general-merchandise sales -- a reversal from previous weeks -- likely indicates Wal-Mart saw a strong flow of gift-card redemptions in the week after Christmas. Even so, the 2.2% gain in same-store sales, those at stores open at least a year, would be Wal-Mart's lowest December gain in five years. Wal-Mart, whose gift-card sales beat expectations this season, is counting on a big sales boost in January from gift-card redemptions. Yet analysts differ on the impact of gift cards on retailers' overall sales. Some argue that they ultimately boost a retailer's sales by generating two trips to the store: one by the card giver and one by the receiver. Others see marginal impact, if any, on any retailer's December sales. Sanford C. Bernstein & Co. analyst Emme Kozloff, speaking of all retailers, said gift cards "will not materially impact December results and should not be used as an excuse for poor performance."
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