Retailers Bloom in Holiday Season - Analyst Blog

November 2010 recorded the fifth straight month of positive sales trends and the retailers are now gearing up for a big week as time counts down to Christmas. The nation's retailers experienced a solid start to the holiday season as consumers opened their wallets and stock up for Christmas.

With just four days to go for the big day, it can be said that retailers have recorded good Christmas sales albeit backed by heavy promotion and discounting in comparison with the last two years. 

According to a research report, eCommerce and apparel sales have solidly contributed to overall sales growth, reportedly recording a respective growth of 13.5% and 9.8% as of December 11, 2010. Women's and men's apparel have accordingly registered a growth of 4.4% and 8.4%, respectively.  Jewelry and luxury market fared better than last year while electronics sales still lagged, rising just 0.4%.

Many of the retailers rolled out their most aggressive sales campaigns so as to lure cost-conscious customers to shop in the last weekend before Christmas. Wal-Mart Stores Inc. (WMT), in order to attract more customers, offered additional discounts including a 32-inch Sony television for $348 plus a $50 gift card and a Magnavox Wi-Fi Blu-ray DVD player for $118 plus a $40 Walmart gift card and a $10 card for movies.  J. C. Penney Company Inc. (JCP) offered a "pick your day" 20% off coupon good for discounts off regular prices, sale and clearance merchandise for any day including Christmas Eve.

Online-Shopping Made Attractive

Tapping the online market for customers unwilling to venture beyond their computer keyboards and hit the stores for bargain deals, retailers offered a wide variety of discounts and gifts online. Some of the retailers declared December 23, 2010, as "Click It to Gift It" day, which incentivize customers to buy gifts online and win free gifts and discounts.  

Online shopping consists of several such promotional events such as "Free Shipping Day," which was held on December 17, 2010, offering free shipping and other deals to customers. Free shipping day recorded a sales growth of 61.0% grossing $942 million.  Green Monday, held on December 13, 2010, recorded sales of $954 million.

High unemployment rates, a falling housing market index and lower consumer spending made retailers uncertain of consumer behavioral trends. But this year came as a much needed relief for the retailers. This is indicative of the fact that consumers are gaining confidence. Despite the general optimism as evidenced by November monthly sales and holiday season numbers, the overall recovery in the economy is still sluggish with high unemployment levels nagging the nation and the consumers need more jobs and pay hikes in order sustain spending in the New Year.

 
PENNEY (JC) INC (JCP): Free Stock Analysis Report
 
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