Retailers post 5.4% gain on Fri., Sat.

But don't read too much into figures, experts warn

December 02, 2003|By BLOOMBERG NEWS

U.S. retailers posted higher post-Thanksgiving sales as people jammed shopping malls and big-box stores over the weekend, the traditional kickoff of the holiday buying season.

Sales rose 5.4 percent to $12.4 billion Friday and Saturday from a year earlier, according to ShopperTrak, which monitors customer traffic at about 30,000 stores.

Visa International Inc. said U.S. spending using its credit and debit cards rose 12 percent Friday and Saturday from a year earlier. Sales using the cards totaled $6.5 billion.

Shoppers were lured by $27 microwave ovens, $30 DVD players and $10 CDs to chains such as Wal-Mart Stores Inc., which reported a record $1.52 billion in sales Friday. The percentage gain, however, was less than half the increase Walt-Mart experienced a year ago.

Jay McIntosh, Ernst & Young LLP's director of retail and consumer products, and other analysts warned against reading too much into the weekend's results.

Last year, sales rose 12 percent in the three days after Thanksgiving, according to ShopperTrak. But sales for the 2002 season spanning November and December rose about 2 percent, the worst gain in 10 years.

"I think this says more about consumers' frugal mindset and less about their willingness to spend," Bill Dreher, an analyst with Deutsche Bank AG, said during a conference call.

Internet sales rose to $200 million Friday, 36 percent higher than on that day a year ago, according to ComScore Networks Inc., an online research company. That compares with the 25 percent to 30 percent gain forecast by the firm for November and December.

"People are making more purchases," said Chuck Davis, chief executive officer of Inc. a Los Angeles online comparison shopping site. "It's an unmistakable turn up."

Among the top product searches on the site were for luxury items such as Louis Vuitton handbags, Movado watches and digital cameras, Davis said.

Holiday sales can account for more than 40 percent of annual sales at some retailers such as Toys `R' Us Inc., the largest U.S. toy chain.

The 6.3 percent sales gain at Wal-Mart on Friday compares with a 14 percent one-day increase a year ago. Taking Wal-Mart's new stores into account, the retailer's sales at stores open at least a year were likely unchanged Friday, Dreher said.

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