CE Sales Were Weak In May, BJ’s, Costco and Target Say
CE was among the weakest categories in May for BJ’s Wholesale Club, Costco and Target, the retailers said Thursday. BJ’s and Costco singled out computers and TVs as products with the weakest performance within the CE category. Target, in its monthly sales results call, said hardlines were “well below the company average, with the softest performance in electronics."
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Costco’s hardlines sales were down overall in mid-single digits, with strong results in “many categories,” including office products, being “offset” largely by weakness in electronics, Bob Nelson, vice president of finance and investor relations, said in that company’s monthly results call. That was “primarily due to softer TV and softer computer sales” than May last year, he said.
"While both TV units and sales dollars were down for the month, dollars were slightly better -- so less negative -- than units” for Costco “due to the slightly higher year-over-year average selling price resulting from increased penetration in LED TVs compared to a year ago,” Nelson said. Also “hurting us” in the category, “primarily in TVs and computer sales,” was weaker “couponing activity this year compared to last year,” he said. Costco Chief Financial Officer Richard Galanti said last week that Q3 TV sales were hurt by a lack of “promotional activity” by manufacturers in the U.S. (CED May 28 p8).
Costco’s May sales increased 11 percent to $6.09 billion in the four weeks ended May 30 versus the same period of 2009. Comparable store sales increased 9 percent overall, with the U.S. markets up 7 percent and markets outside the U.S. up 17 percent. The four-week period included 28 days of sales compared to only 27 last year, and the Memorial Day holiday fell in the reporting month of May last year but not this year, Costco said. That “holiday shift positively impacted” its May total and comparable store sales by about 2 percent overall and 3 percent in the U.S., it said. The strongest markets for Costco in the U.S. were Texas, the Midwest, Southeast and Northwest, while the strongest regions outside the U.S. were Canada and South Korea, Nelson said.
BJ’s sales for the four weeks ended May 29 increased 11.3 percent from the same period last year to $871.9 million. Comparable club sales grew 6.8 percent after falling the same amount in May 2009 from May 2008, it said. Sales “increased in weeks one, two and four, with the highest increase in week four,” compared to last year, it said. Sales decreased in week three. The calendar shift in the timing of Memorial Day hurt week three sales, but helped BJ’s in week four, it said. Sales were stronger in May than May 2009 in all regions, but the largest increase was in the Southeast and the smallest increase was in metro New York, it said.
Target’s sales for the four weeks ended May 29 increased 3.7 percent to $4.622 billion from the same period last year, it said. May comparable store sales inched up 1.3 percent -- a result that was “somewhat below our expectation,” CEO Gregg Steinhafel said in a prepared statement. “Our recent experience reinforces our belief that we will continue to experience volatility in the pace of economic recovery,” he said.