In­creased costs bit re­tail­ers in the US

The up­dates were a mixed bag over­all, with sev­eral re­tail­ers re­port­ing small or mod­er­ate in­creases.

Times of Oman - - MARKE -

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.

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