Consumer Confidence rose more than forecast in December
Washington, D.C. — The Conference Board report, released Tuesday, found that confidence among consumers rose to an eight-month high in December, increasing to 64.5 from a revised 55.2 reading in November.
The index reading exceeded all estimates in a Bloomberg News survey and was the highest since April.
Unemployment that dropped last month to its lowest in more than two years and the cheapest gasoline since February are prompting households to take advantage of discounts during the holiday shopping season. The improvement in sentiment may help sustain household purchases into the New Year.
“A large part of the problem in the economy is one of confidence, and to the extent that sentiment begins improving it would be a positive for growth,” Dana Saporta, director of U.S. economic research at Credit Suisse in New York, told Bloomberg. “There are still a lot of headwinds out there, including the continued decline in home prices.”
The median forecast of 69 economists surveyed by Bloomberg forecast the U.S. consumer confidence gauge would rise to 58.9. Estimates ranged from 52 to 63. The measure averaged 53.7 during the recession that ended in June 2009 and 98 during the economic expansion that ended in December 2007.
Other surveys have reflected similar gains in optimism. The Bloomberg Consumer Comfort Index improved to minus 45 in the period ended Dec. 18 from a reading of minus 49.9 the prior week, marking the biggest seven-day gain since January. The Thomson Reuters/University of Michigan index of consumer sentiment rose to a six-month high in December.
Holiday sales will rise 3.8%, compared with a 5.2% advance last year, according to the National Retail Federation.
Best Buy issues statement regarding online order cancellations
Minneapolis — After a slew of online orders were cancelled in November and December when Best Buy couldn’t keep up with demand, the company issued the following statement on Tuesday:
“What was wrong is that there was an unacceptable delay between order confirmations and cancellations, and for that we are very sorry,” said Susan Busch, senior director of Best Buy’s public relations. “It’s important to note that this was a rare situation based on a high volume of orders over a short period of time.”
Busch said that Best Buy was giving electronic gift cards to affected customers as a goodwill gesture.
Best Buy cited overwhelming demand of hot product offerings, which led to less than 1% of orders’ being canceled, according to Busch. Customers expressed their frustration in Best Buy’s online forums, with some parents commenting that the retailer had ruined Christmas for their children.
Some customers in the forum accused Best Buy of committing fraud, as the retailer’s cancellations could be seen as a deliberate bait-and-switch tactic designed to lure customers into its store with false promises of hot sales, depriving them of the ability to buy the items from a rival store.
Carrefour to sell, lease-back 97 stores
Paris — A Tuesday report by the Wall Street Journal said that French retailer Carrefour SA has sold 97 supermarket sites to an investment company for $477 million.
Carrefour, the world’s second-largest retailer after Wal-Mart Stores, will continue to operate the sites through 12-year leases under its Carrefour Markets banner. The company said the sales and lease-backs will allow it to optimize the use of its capital, which will be reinvested into other real estate.
Carrefour said it has multiple renewal options for the 97 supermarkets it has sold to La Francaise AM, a investment fund majority-owned by Crédit Mutuel Nord. The leases are worth 6.5% of the sale price, including transfer duties, Carrefour said.