Sales Weak but DVD Players Sell
DVD Players, George Foreman Grills, Retro Toys Among the Bright Spots in an Otherwise Gloomy Holiday Season
By ANNE D'INNOCENZIO
AP Business Writer
NEW YORK (AP) -- Items related to the heart and home -- from kitchen appliances to lockets -- are ringing up solid gains for retailers, emerging as a pocket of strength amid what is expected to be the weakest holiday sales season in a decade.
Despite massive amounts of marked-down products still languishing on retailers' shelves this holiday, certain items appear to have hit a note with consumers as they re-evaluate their priorites, spending more time at home, in the aftermath of Sept. 11. Harry Potter merchandise, arts and crafts, George Foreman grills, retro toys like Shrinky Dinks and GI Joes, DVD players and games consoles have been this holiday's hot sellers.
Such hot spots, though limited, have even surprised Marian Salzman, worldwide director of strategy and planning for New York-based marketer Euro RSCG, who expected stores would be empty.
``I though consumers would buy even less,'' she said.'' I am surprised that there is some consumer optimism.''
Following the terrorist attacks, consumers, nervous about massive layoffs and political uncertainties, pulled back even more, particularly on apparel and jewelry.
Even deep discounting, which was stepped up this past weekend, hasn't enticed consumers to splurge. From Nov. 23 through Dec. 16, sales at specialty stores at 80 of the nation's regional malls were down 3 percent, according to the International Council of Shopping Centers.
``What has happened since Sept. 11 is that consumers realize they have a choice: to buy nothing,'' said C. Britt Beemer, chairman of America's Research Group, based in Charleston, S.C. ``They realize that being with their family is more important than buying something nice for their family.''
Even toy retailers, which were hoping that parents would splurge on their children in these scary times, have found they've become choosier. Sales of highly publicized watch-me robotic pets, like Hasbro's $199 I-Cybe, have been difficult, according to Chris Byrne, an independent toy consultant. He also pointed out that he is seeing parents not buy a second-alternative, if they can't find the one they want.
David Conti, a 41-year-old father from Boxford, Mass., typifies the current consumer spending trend. He's cut back on holiday spending by $300 to $700, zeroing in on home-oriented purchase, like DVDs for his two children. For himself, he's purchased a number of regional Italian cookbooks and kitchen appliances on Amazon.com, noting that he is cooking more, and is dining out less.
``I am trying to spend more time with my family,'' he said. ``It just doesn't seem right to be spending on items like jewelry.''
Retailers that have the right type of merchandise are the ones that are doing well this holiday.
``We are at the heart of what is happening,'' said Bryan DeCordova, executive vice president and chief financial officer of Michaels Stores Inc., the nation's leading arts and crafts retailer, which reported a 20 percent increase in November sales at stores open at least a year, known as same-store sales. Its Christmas category, which includes wreaths, trees and garlands, is up 50 percent on a same-store sales basis, indicating that consumers are staying home.
This holiday, Wal-Mart Stores Inc. has seen sales of pajamas and chicken roasters double from a year ago. Holiday sales have also been fueled by game consoles and other consumer electronics. Arts and crafts have been an ``above-average performer,'' said Tom Williams, company spokeswoman said.
At e-tailer Amazon.com, business has been driven by consumer electronics, namely DVD players, game consoles and digital cameras, anything Harry Potter, and kitchen appliances. For example, the company is expected to sell 100,000 DVD players, more than double from last year's 40,000 units, helped in part by more affordable prices. The number of George Foreman and Weber grills sold combined are expected to triple to 45,000 this holiday, from 15,000 a year ago.
Sales of fitness and game equipment, including $700 treadmills and $500 pool tables, are up triple-digits at Sears.com from a year ago, according to Chuck Cebuhar, vice president. Sales of housewares have more than doubled as well.
``There's no question that people are using this holiday season to reflect what is important, moving away from a more self-centered focus to being more family-oriented,'' he said.
At cable television's QVC's shopping channel, sales of kitchen appliances have surged 21 percent, while its consumer electronics business, fueled by DVD players, digital cameras and computers, has soared 54 percent, according to Doug Rose, vice president of merchandising and brand development.
Even in the sluggish jewelry area, there have been some bright spots. David Gow, chief executive of Ashford.com, an online luxury site, reported that double-digit sales increases of diamonds, particularly engagement rings, have helped keep the average holiday ticket level with last year's $500. Excluding diamonds, the average ticket would have been $400.
Jewelry e-tailer Bluenile.com reported that lockets, priced from $30 to $300, are among the top sellers in unit sales this holiday, according to Sue Bell, vice president of marketing. Diamond sales, including engagement rings, are up 25 percent.
``Consumers are looking for something sentimental, things that make you feel good,'' she said.
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