Increased costs bit retailers in the US
The updates were a mixed bag overall, with several retailers reporting small or moderate increases.
NEW YORK: Holiday shopping reports released underscored anew the challenges US retailers face in the Amazon era — even if consumers are willing to open their wallets to spend.
The updates were a mixed bag overall, with several retailers reporting small or moderate increases in comparable store sales during the critical NovemberDecember period.
But a report from Macy’s aroused the most angst on Wall Street, after the chain slashed its profit forecast even as it signaled a modest increase in sales.
Shares in Macy’s plunged almost 20 per cent, while nearly every major retailer was pulled down as well.
That included companies like Target that reported higher holiday sales and confirmed — but did not raise — profit forecasts.
The results were an ugly finale to a holiday shopping season that opened with high expectations owing to robust consumer confidence amid a strong employment market, relatively low gasoline prices and a boost from tax cuts.
Mastercard SpendingPulse in December estimated holiday sales growth of around 5.1 per cent to more than $850 billion, the strongest jump in the last six years. By that estimate, the 2018 holiday shopping season was a strong one — just not for retailers.
Traditional brick-and-mortar retailers have invested in heavily beefing up their online platforms and offering incentives to lure buyers, such as free shipping during the peak holiday season.
At the same time, these companies also have spent heavily to improve the in-store experience, hiring consultants to help beautify the surroundings and in many cases employing more workers during the peak festive season.
The latest results suggested retailers still have not found a winning recipe for the transition to the e-commerce era.