FINANCE

ICSC: Last-minute holiday shopping gives 4.5% year-over-year lift

BY Katherine Boccaccio

New York City — A report released Wednesday by the International Council of Shopping Centers found that a last-minute shopping surge gave merchants a solid lift during the final week before Christmas.

According to the ICSC-Goldman Sachs Weekly Chain Store Sales Index, same-store sales rose 0.9% for the week ended Saturday compared with the previous week. That is also up 3.4% from the week before and up 4.5% over the same period a year ago.

The index serves as a sales proxy to 24 major retailers including Macy’s Inc. and Costco Wholesale Corp.

"The downs and ups were much more accentuated," said Michael P. Niemira, chief economist, ICSC. "It just shows how cautious the consumer is. Consumers are bargain hunters more today than ever before."

For the week ended Nov. 26, which included Black Friday, stores had the biggest sales surge compared with the prior week since 1993. The cumulative two-week-sales drop-off that followed marked the biggest percentage decline since 2000. Then, during the final two weeks before Christmas, sales surged again, by the highest rate since 2005, according to the index. "The holiday season was good but uneven," Niemira said.

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OPERATIONS

Consumer Confidence rose more than forecast in December

BY Katherine Boccaccio

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.

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Best Buy issues statement regarding online order cancellations

BY Katherine Boccaccio

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.

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