SHOPPERS, DISCOUNTS OUT
IN FORCE
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 most people consider music 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.
