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Bon-Ton Stores Inc. Message Board

  • bubble_go_bye_bye bubble_go_bye_bye Dec 27, 2004 8:58 AM Flag

    8.1% Rise in Spending Part 2

    The divided picture was evident at mass merchants, which in some cases registered their best gains in higher-priced categories such as electronics. At the end of the Thanksgiving weekend, Wal-Mart Stores Inc., the world's largest retailer, tempered an earlier forecast of 2% to 4% gains to a more-modest rise of 1% to 3% in December for stores open at least a year. As it headed into the last week of shopping, however, Wal-Mart says it saw store traffic pick up.

    At 3 p.m. on Christmas Eve, for example, the parking lot at a Wal-Mart discount center in North Dallas was completely full. While some customers were stocking up on paper towels and other supplies, most baskets were overflowing with flat-panel televisions, DVD players, digital cameras and toys.

    Inside, customers crowded around the bin filled with $5 DVDs; men were lined up at the jewelry counter. Lines were backed up at the cash registers. One shopper tried to use a self-checkout register, but it wouldn't take her money: its internal cash-collection apparatus was full.

    Sears, Roebuck & Co., of Hoffman Estates, Ill., said its stores were generally pleased with the strong customer traffic in the week leading up to Christmas. Electronics, tools and apparel were among the most popular purchases in the final days of the holiday season, according to a Sears spokeswoman.

    A lack of must-have toys like Tickle Me Elmo meant toy spending rose just 1% this year, according to the SpendingPulse data. Spending at book, music and video stores, along with sporting-goods retailers, showed meager gains of 0.5% and 2.9%.

    Consumer electronics grew 4.2%, driven by sales of Apple's iPod player and digital cameras. Apparel and home furnishings retailers saw the strongest spending growth, up 9.8% and 9.7%, respectively. Fur-trimmed sweaters, boots and cashmere were strong sellers, as were modish iPod holders.

    Regional spending mirrored the economic recovery that started about 18 months ago, MasterCard's Mr. Furman says. "The coasts recovered first, so last year their spending was stronger," Mr. Furman said. "This year the rest of the country caught up."

    By region, the Great Plains area, including states like Nebraska, Kansas and Montana, grew 11.4%, while Mountain states such as Colorado, Utah, Wyoming and Arizona ticked up 11.3%. The Northeast grew just 5.1%, the Mid-Atlantic 5.7%, and South Central 5.8%. Southeast areas like Florida grew 7.1% and Pacific regions like California grew 7.8%.

    Craig Johnson, president of Customer Growth Partners LLC, a New Canaan, Conn., consulting firm, says most holiday spending forecasts don't account for the fact that consumers are moving away from disposable goods, such as apparel, and investing more in purchases for their home. The firm has been predicting a 6.5% to 6.9% rise in holiday retail sales.

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