Online holiday sales up 36 percent

  • Thursday, January 3, 2002 9:00pm
  • Business

Associated Press

NEW YORK — Online sales this holiday season turned out to be something to cheer about in an otherwise gloomy selling season, as more consumers turned to the Web for bargains, according to various company reports and surveys released this week.

The good news from the online front is far different from the brick-and-mortar world, which, with the exception of value-oriented chains like Wal-Mart Stores Inc., struggled throughout the holiday season. Luxury retailers, in particular, were hit hard.

Bargain-hungry consumers found it was more efficient to find the best discounter online than to go from store to store, said Chuck Davis, chief executive of Bizrate.com, a Web site and research firm that tracks and compares 2,000 online sites.

Between Nov. 19 and Dec. 24, online sales, excluding travel, were up 36 percent to $6.57 billion, compared with $4.83 billion last year. Bizrate.com had projected a gain of 31 percent for the season.

The average online purchase this holiday was $126, up from last year’s $112, Davis said.

A separate report from comScore Networks Inc., a Reston, Va.-based research firm, said the online sales during the wider fourth-quarter period were coming in ahead of projections.

From Oct. 1-Dec. 23, holiday sales, excluding travel, totaled $9.6 billion. ComScore now expects fourth-quarter online sales to reach $10.5 billion, up nearly 15 percent from a year ago, and up from earlier projections of $10 billion to $10.25 billion.

Michael Niemira, vice president of Bank of Tokyo-Mitsubishi Ltd., said he expects an anemic average annual gain of 1.5 percent to 1.7 percent in holiday season sales for the 88 brick-and-mortar stores he tracks.

That likely would be the worst performance in the 30 years Niemira has tracked retail data. Niemira’s previous projection was for sales growth of about 2 percent, which still would be the worst showing since at least 1990.

The bulk of brick and mortar retailers will be reporting their December sales on Jan. 10.

Wall Street analysts are closely watching Amazon.com, the bellwether of the online retail industry, to see whether it delivers on its promise for fourth-quarter pro forma operating profitability, which excludes several expenses that must be factored into net results.

Amazon drew 199 million shopping visits this holiday, a 49 percent increase from a year ago, becoming the ninth-largest fastest growing site, according to Nielsen/NetRatings, an Internet research firm.

"It was a busy holiday season, and it shows just how the online (business) has become part of the mainstream of American shopping habits," said Bill Curry, an Amazon spokesman, who declined to be more specific on the company’s performance. Amazon is scheduled to report its results Jan. 22.

America Online Inc., the world’s leading interactive company, reported that online retail purchases, excluding travel, by its AOL members totaled $11 billion for the fourth quarter, up 72 percent from a year ago. For 2001, online spending jumped to more than $33 billion, up 67 percent from the previous year.

Among retailers that have reported preliminary results, 1-800-Flowers.com, which sells flowers and other gifts, said Thursday that it expects its second-quarter earnings results, due out Jan. 23, will at least meet Wall Street projections of 2 cents a share.

Meanwhile, luxury e-tailer Bluenile.com, fueled by sales of loose diamonds, engagement rings and lockets, achieved its first profitable quarter during the holiday period.

Copyright ©2002 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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