Computer mice are expected to get a preholiday workout this year, though online holiday sales are scheduled to log the slowest growth ever...
Computer mice are expected to get a preholiday workout this year, though online holiday sales are scheduled to log the slowest growth ever, part of a broader slump in retail spending. The online shopping season kicks off unofficially with Cyber Monday, the first business day after Black Friday.
Forrester Research expects 12 percent growth for holiday online sales or $44 billion for the November and December period. The period comprises about a quarter of the year’s online sales. Online growth will likely still be much better than growth in sales at traditional brick-and-mortar stores, notes Citi Investment Research analyst Deborah Weinswig. She expects holiday sales to stay flat or edge up 1 percent.
Web sales are already slowing, according to comScore. Online retailing giant eBay (EBAY) last month predicted lower fourth-quarter sales and profit and said it will cut 10 percent of its work force.
Jefferies & Co. analyst Youssef Squali says online retailers are poised for long-term growth but the recent sluggishness presents a speed bump. Retailers might be forced to offer “aggressive promotions and incentives such as free shipping,” he adds. “We believe that online retailers … face higher competition in wooing the consumer,” Squali says.
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Among online retailers, those specializing in discretionary items, such as photo-sharing service Shutterfly (SFLY) and online movie-rental service Netflix (NFLX), are more vulnerable to the spending slowdown. He rates Shutterfly “buy” and Netflix “hold.”
Some retailers could benefit from customers’ frugality, Squali says. Bargain-hunters are likely to use Google (GOOG) to research purchases.
VistaPrint (VPRT) could suffer less than peers as it offers complimentary and low-cost products like printed business and holiday cards. He rates both “buy.”
The Associated Press