Electronics stores the holiday winners
By Reuters
Special to CNET News.com
December 27, 1999, 2:35 p.m. PT
CHICAGO--Santa's sled was full of digital video disc players, digital cameras, jewelry and cashmere shawls, giving U.S. retailers selling those products, along with discounters, the merriest holiday shopping season, analysts said today.
Although a hot U.S. economy is expected to ensure most retailers will record the best holiday season in many years, stores offering digital electronics and luxury goods and discounters that have seen good results all year are expected to be the season's winners.
"It's still a little too early to tell, but we can say that electronics were very strong this year relative to last year, simply because of the product that was available this year," said Alan Mak, retail industry analyst with Argus Research.
"There was so much more product at good price points. DVD [digital video disc] players dropped below $200, and they were at that $300 mark last year," he said.
Most major retailers will report December sales results on Jan. 6.
In addition to consumer electronic stores like Best Buy and Circuit City Stores, Mak and others, analysts said discounters like Wal-Mart; Troy, Mich.-based Kmart; and Minneapolis, Minn.-based Dayton Hudson Corp.'s discount Target stores all are poised to report strong holiday sales.
"Generally speaking, the discounters appeared to have shown the best gains as they have been doing all year," Jeffrey Edelman, retail industry analyst with Paine Webber, said.
Discounters continue to outpace sales growth at more traditional stores because they are adding stores at a rapid pace and are also selling a broader range of products, for example food and pharmacy items, Edelman said.
Today, Wal-Mart, the world's largest retailer, said it had a strong holiday shopping weekend, and sales for the week ended Dec. 24 were on track to meet its forecast for 5 to 7 percent growth for the month.
Wal-Mart, based in Bentonville, Ark., said in a recorded message that it saw strong sales of small appliances, toys, electronics, jewelry and sporting goods during the week.
Jewelry stores in shopping malls, such as Irving, Texas-based Zale, were also seen posting strong results, as consumers spent more on fewer items, an industry analyst said.
"Consumers who went shopping bought nicer gifts but bought fewer of them," said Britt Beemer, chairman of America's Research Group research firm. "Also, jewelry stores were expecting a strong Christmas and were fairly promotional."
Although clothing sales were not as strong as some other merchandise categories, analysts noted the popularity of cashmere sweaters, scarves, shawls as well as colorful clothing.
"In terms of apparel, whoever had bright colors appeared to be the winner because people are very tired of black," Argus Research's Mak said. "Cashmere was huge this year, basically all because of Banana Republic and all of the marketing that it did."
Mak said store traffic at San Francisco-based Gap's stores was high as consumers were drawn in by the company's catchy television advertisements and colorful clothes.
In general, however, sales of apparel as gifts are edging lower because of the U.S. shift to a more casual workplace, Research America's Beemer said.
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