The Journal Gazette
Thursday, January 16, 2020 1:00 am

Target sees holiday sales slide

Associated Press

Target reported a rare shortfall in holiday sales, raising concerns about the challenges ahead for the traditional retail industry even as the economy remains strong.

Target's disappointing growth of 1.4% for November and December, dragged down by toys and electronics, fell well below the previous year. Target joined a growing list of retailers reporting meager performances during the critical holiday shopping season.

Target cut its expectations for same-store sales growth for the entire quarter Wednesday. Shares fell more than 7% in afternoon trading, making it the biggest decliner in the benchmark S&P 500.

The latest evidence of weak numbers from a major retailer cast a pall over the entire sector, with investors leery of any hints that the consumer, a major driver of the U.S. economy, is getting nervous. The retail sector declined while overall markets were up..

The report of weak toys and electronics sales also hit other companies like Hasbro and Best Buy.

However, analysts say the consumer remains financially strong, and some blamed increasing competition from not only Amazon but a slew of online competitors from mattress maker Casper to home goods purveyor Wayfair. Many believe that they are all starting to create material headwinds for traditional retailers.

“We are seeing a healthy consumer that is choosing different ways to spend the same amount of money,” said Joel Bines, managing director at consulting firm AlixPartners. “The consumer today is presented with an array of options for virtually every product you can think of from footwear to apparel to toys and games to electronics.”

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