Holiday Cheer for US Online and Discount Retailers

27 December 2001

Although the holiday season proved ho-hum for many US ‘bricks and mortar’ retailers, discounters led by Wal-Mart and the e-tail community prospered mightily.

The former reported on Wednesday that sales across the holiday season were above target: “Our original estimate for the December period was for a comparable sales increase for the total company at the lower end of the 4 to 6 percent range. So far ... sales for the December reporting period are around the upper end of the range,” said a Wal-Mart spokesperson.

Meantime, Yahoo and MSN flexed their pecs with a sharp rise both in customer numbers and sales volumes. Customers have so far spent $10.3bn online in the fourth quarter of 2001, reports Yahoo, while since Thanksgiving transactions via its shopping channel rose by more than 86% year-on-year. The number of customers visiting MSN’seShop site more than doubled from a year ago.

Commented Yahoo Shopping vp and general manager Rob Solomon: “The big online shopping portals such as Yahoo, Amazon and eBay did well this year partly because online shopping is becoming mainstream and is gaining market share from the offline world; but also because there is consolidation online, with far fewer competitors.”

Although Wal-Mart and other major discount retailers continued to report strong sales in the face of a nationwide sales slump – continuing a trend that predated and was exacerbated by the events of September 11 – not all discounters have benefited similarly.

At K-Mart, seasonal sales growth on a same-store basis lagged at the low end of a 0-2% range and the chain reported Wednesday a significant decline in customer traffic in the third week of December.

News source: Financial Times