Page 7 - ATD 16Jan2016
P. 7
U.S. NEWS A7
Saturday 16 January 2016
US Financial Front:
Modest holiday sales report shows challenge for 2016
A. D’INNOCENZIO there are trade-offs. On- Janae Melvin shops for gifts at Old Navy in Kansas City, Kan. Holiday shoppers flocked online
AP Retail Writer line shoppers tend to be during the critical holiday shopping season, but overall sales in November and December were
NEW YORK (AP) — Holiday more targeted when they disappointing.
shoppers flocked online buy, and typically buy only
during the critical holi- what they need on their list. (AP Photo/Charlie Riedel)
day shopping season, but Stores still need shoppers in
overall sales in November the store because there’s a stores globally, including to retool its business. The its more than 11,000 stores
and December were dis- big opportunity for them to 159 in the U.S. as it looks closures are a fraction of globally.q
appointing. Sales rose 3 buy other items.
percent to about $626.14 Moreover, as an increas-
billion, according to The ing number of stores offer
National Retail Federation. free returns to make on-
That’s below the forecast line shopping more conve-
for a 3.7 percent gain the nient, they are dealing with
group had expected. higher costs in processing
The group blamed the those returns from custom-
shortfall on unusually warm ers. In fact, Kurt Salmon, a
weather that led to bigger- retail consulting firm, esti-
than-planned discounts on mates that as much as 30
clothing and other cold- percent of online orders
weather items. It also point- are returned.
ed out that stores don’t “There are big costs in ser-
have the ability to raise vicing an online customer,”
prices in a still tough spend- said Steve Osburn, sup-
ing environment, leading ply chain strategist at Kurt
to worse-than-expected Salmon.
deflation in electronics like And retailers still need
TVs and other categories. shoppers in the store be-
A bright spot was online, cause there’s a big op-
though it represents just portunity for them to buy
about 15 percent of total other items. Analysts esti-
holiday sales. Online sales, mate that the conversion
which are included in the rate — the percentage of
figure, rose 9 percent to shoppers at physical stores
$105 billion. That’s higher that end up buying there—
than the group’s original is 30 percent, compared to
forecast of 6 percent to 8 3 percent online.
percent growth. At the same time, the shift
“Make no mistake about online is forcing stores to
it, this was a tough holiday rethink the size of their
season for the industry,” stores and how big their
said Matthew Shay, Na- entire fleet should be. In
tional Retail Federation’s response to heavy com-
CEO. petition from online leader
The holiday season is a Amazon.com, major stores
crucial period of retailers have been investing in big-
because it accounts for ger distribution centers to
as much as 40 percent of speed up online deliver-
retailer’s annual sales. But ies and push free shipping.
the season has exposed They’ve also been expand
the balance retailers have services like allowing online
to strike between satisfy- shoppers to pick up their
ing customers’ shopping orders at the store.
needs online, while also try- Against this background,
ing to get them into their several major stores have
physical stores. announced they are clos-
While many retailers have ing stores. Wal-Mart Stores
said online sales surged Inc., the world’s largest re-
during the holiday season, tailer, said it is closing 269
