Tags: Wal-Mart | Holiday | Sales | Forecast

Analyst: Wal-Mart's Holiday Sales May Miss Forecast

Thursday, 11 Nov 2010 12:48 PM

Wal-Mart Stores Inc. may fail to turn its sales around by the holiday season as planned since the discount retailer has yet to lure customers back from rival outlets, according to Cleveland Research Co.

Store traffic has declined and is unlikely to recover in the next two months, Cleveland analyst Jeff Stinson said in a report yesterday. The Bentonville, Arkansas-based company also has had to cancel some promotions to “protect” profit margins, he said.

That evidence suggests Wal-Mart won’t revive sales at U.S. stores open at least a year by the fourth quarter as Chief Executive Officer Mike Duke predicted, Stinson said. Duke aims to attract shoppers by bringing back products the retailer had removed, revamping promotional displays, and offering free shipping to homes on thousands of holiday items.

Wal-Mart’s U.S. same-store sales have declined for five straight quarters. The world’s biggest retailer, which faces increasing competition from dollar stores and SuperValu Inc.’s Save-A-Lot discount grocery chain, is scheduled to report third- quarter results next week.

Greg Rossiter, a spokesman for Wal-Mart, declined to comment on the Cleveland report.

The free shipping offer, which applies to almost 60,000 products including furniture, jewelry and video games, is on now through Dec. 20, the company said today in a statement. It isn’t valid on Apple Inc.’s iPod and iPad devices.

'Aggressive' Season

Wal-Mart is stepping up promotions as it prepares for an “aggressive” holiday season, William Simon, the U.S. stores chief, said at a September investor conference. Holiday sales industrywide may climb 2.3 percent to $447.1 billion this year, according to estimates from the Washington-based National Retail Federation.

Sales at that rate would be the best showing in four years. Some retailers, including department-store chain Kohl’s Corp. and Toys “R” Us Inc., have added temporary staff to help out.

The November and December holiday shopping season may generate almost $52 billion in online sales, a 16 percent increase from 2009, according to Forrester Research Inc. in Cambridge, Massachusetts. Target Corp., the second-biggest U.S. discount retailer, is also offering free shipping on over 800,000 items on online orders with at least $50 spent on eligible products.

Some shoppers are still holding back on purchases as they struggle to recover from the worst economic slump in about 70 years. Consumer spending rose less than forecast in September as incomes declined for the first time in more than a year, according to Commerce Department figures released this month.

Wal-Mart fell 36 cents to $54.15 at 12 p.m. in New York Stock Exchange composite trading. The shares had risen 2 percent this year before today.

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Wal-Mart Stores Inc. may fail to turn its sales around by the holiday season as planned since the discount retailer has yet to lure customers back from rival outlets, according to Cleveland Research Co. Store traffic has declined and is unlikely to recover in the next two...
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Thursday, 11 Nov 2010 12:48 PM
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