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Holiday online sales soar 26 percent: report

Amazon.com Inc. reported its best holiday season ever, reflecting a comScore Networks study that estimated holiday online retail spending at $24.6 billion, up 26 percent from $19.6 billion the previous year.

ComScore found that 12 days during the November-December holiday season surpassed $600 million in spending, while only six days in 2005 hit $500 million.

“What was different this year was the acceleration of late-in-the-season sales,” said Gian Fulgoni, chairman of comScore, Reston, VA. “Consumers are comfortable with retailers to get the packages to the mail, which is a positive sign that the channel has really matured.”

Wednesday, Dec. 13, was the heaviest online sales day of 2006 at $667 million, followed by $661 million on Dec. 11. Cyber Monday, Nov. 27, was the 12th-heaviest online sales day.

Spending in the first three weeks of the season rose 23 percent from 2005 levels. Weeks 4-6, which saw the greatest share of holiday e-commerce spending, were consistent with the 26 percent growth of the season as a whole.

A spending surge occurred in the final three weeks of the season, weeks 7-9, as procrastinators came out in force, driving a 31 percent increase versus 2005. The week leading up to Christmas saw the biggest surge, up 45 percent from a year ago.

Amazon.com found this to be true, as Dec. 11 was its busiest day, with customer orders exceeding 4 million items. Amazon spokesman Craig Berman said extended shipping deadlines and good deals helped boost sales.

“We were able to extend our Super Saver deadline by two days until Dec. 17,” he said from Amazon’s Seattle headquarters. “This extended the shopping season for customers who wanted free shipping.”

Amazon would not disclose numbers but said that best sellers by units sold included the “Taking the Long Way” CD by the Dixie Chicks and the DVD for “Pirates of the Caribbean: Dead Man’s Chest.”

The Internet retailer also launched its first Amazon Customers Vote promotion, where 1,000 Xbox 360s were sold in 29 seconds and 1,000 Axion portable DVD players were sold in 34 seconds.

So as for rumors of soft sales for retailers this holiday season, Mr. Fulgoni said such soft sales figures were for in-store only and didn’t take account of the shift to online spending.

“Online sales now represent 7 percent of consumer spending, and not including the 26 percent increase that these sales saw over the last year in your holiday figures does not include the whole picture,” he said. “The Internet as a whole is so substantial that you have to include it in any computation.”

During December, the Wal-Mart Stores Division reported $43.996 billion in sales for the five-week holiday season, up 8.8 percent from a year ago. Total sales for 2006 reached $320.388 billion, up 11.6 percent over 2005. The retail giant performed strongly in electronics and groceries, including pets, household chemicals, paper goods, health and beauty, food and pharmacy, during the holiday season.

“We believe Wal-Mart is becoming more of a destination for electronics as consumers recognize that we have a leadership position on low prices,” said Eduardo Castro-Wright, president/CEO of Wal-Mart Stores Division U.S., Bentonville, AR.

As with Amazon.com, the “Pirates of the Caribbean: Dead Man’s Chest” DVD release was a hit, while total DVD sales did well throughout the holidays. Wal-Mart’s price rollbacks on board games, which started in mid-October and ran through Dec. 24, generated strong sales for toys, as did ride-on vehicles. Marketing spending was higher this December than last year.

Though overall company sales were soft in apparel and home as Wal-Mart had anticipated, dropping prices in apparel helped move units. Warmer-than-normal temperatures in most of the United States also contributed to a slowdown in sales of some winter items.

Several other retailers reporting December sales results last week also blamed unseasonably warm weather for the poor performance of cold weather-related items.

J.C. Penney Company Inc., Plano, TX, said certain apparel categories “were impacted by unseasonably warm weather across much of the country.” Though the retailer reported a 3.5 percent companywide sales increase and 2.6 percent comparable-store sales increase for the five weeks ended Dec. 30, it indicated that overall direct sales decreased 1.4 percent. E-commerce sales rose 15.2 percent at www.jcp.com.

Federated Department Stores Inc., Cincinnati, cited balmy weather in posting an 8.5 percent decrease in company sales. The Internet provided one highlight.

“Particularly encouraging was the growth of online sales on macys.com, which is attracting new customers across the country,” Terry J. Lundgren, Federated’s chairman and president/CEO, said in a statement.

Chico’s FAS Inc., Fort Myers, FL, also disappointed with a 2 percent decrease in comparable-store sales for the five weeks ended Dec. 30. Overall sales rose 11.9 percent to $193.2 million.

Signs of strength emerged from the higher end of the market. Neiman Marcus Inc., Dallas, generated an 8.3 percent gain in revenue, totaling $689 million for the five weeks ended Dec. 30. Comparable revenues in its specialty retail stores segment rose 7.3 percent for the period. At Neiman Marcus Direct, comparable revenue climbed 5.8 percent.

Nordstrom Inc., Seattle, saw a 9.8 percent increase in sales in December and a 9 percent increase in same-store sales.

Jos. A. Bank Clothiers, Hampstead, MD, said that sales for the fiscal month ended Dec. 30 increased 12.1 percent to $102.1 million. Comparable-store sales rose 1.4 percent while combined catalog and Internet sales climbed 20 percent.

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