Deep discounts hit US holiday sales
Last minute rush boosts sales figures
January 10 2004
US retailers saw strong December sales thanks to a last minute shopping rush, but Wal-Mart and others said high levels of discounting hit profit.
Wal-Mart reported a 4.3 per cent increase in December same-store sales, but said earnings for the fourth quarter would be at the low end of expectations.
Rival discounter Target reported a 4.1 per cent same-store sales gain, also at the low end of forecasts, and said sales at its Mervyn’s department store chain were weak.
Department store chain Kohl’s, which competes in the middle market, said its quarterly profit could be up to 23 per cent lower than forecasts because of steep markdowns.
Gap, which has had a very strong year of recovery, also disappointed the markets with flat sales for December in it core Gap chain.
Sears Roebuck, the largest US department store chain, reported a December same-store sales fall of 0.8 per cent.
More upmarket clothing retailers, including Nordstrom and Neiman, saw better sales in a US market in which luxury retailers generally had a better Christmas than the high competitive mainstream retail sector.
