Cash registers won’t be ringing for retailers this holiday season, a marketing researcher warned Wednesday.
“The retail landscape is like nothing I’ve seen,” C. Britt Beemer, chief executive of America’s Research Group, said after conducting a survey of 1,000 consumers.
Speaking in a conference call arranged by UBS retail analysts, Mr. Beemer said online retailers would be hurt by buyers’ reluctance to pay shipping and handling fees, while computer sales both online and offline would be “dramatically impacted” as financing deals dry up.
“I think you’re going to see computers challenged and you’re seeing Best Buy confirming that,” he said. “The computer category is seeing the greatest impact in their history.”
On Wednesday, big-box electronics retailer Best Buy lowered its revenue and earnings guidance because of uncertainty surrounding the “critical” holiday shopping season.
“Since mid-September, rapid seismic changes in consumer behavior have created the most difficult climate we’ve ever seen,” said Brad Anderson, chief executive of Minneapolis-based Best Buy.
In fiscal October, Best Buy reported a 7.8 percent decline in U.S. and a 6.4 percent decline in international comparable store sales. The company said comparable store sales for the November through February period could tumble by 5 percent to 15 percent.
Best Buy’s warning came just days after rival electronics chain Circuit City filed for chapter 11 bankruptcy protection. On the conference call, Mr. Beemer estimated that, barring the intervention of a “miracle investor,” the chances of Circuit City surviving after emerging from bankruptcy court are “under 10 percent.”
The bleak retail forecast would take a toll on a wide range of computer and electronics companies such as Dell, Hewlett-Packard, and Microsoft. The new crop of smart phones, such as the iPhone and the Android-based G1, however, will be a strong point for electronics retailers, Mr. Beemer said.
With consumers curbing their spending, Mr. Beemer said deep-discounters such as Wal-Mart and membership wholesale clubs like BJ’s and Costco should benefit.