Featured Articles

IHS teardown reveals Galaxy S5 BOM

IHS teardown reveals Galaxy S5 BOM

Research firm IHS got hold of Samsung’s new flagship smartphone and took it apart to the last bolt to figure out…

More...
Galaxy S5, HTC One M8 available selling well

Galaxy S5, HTC One M8 available selling well

Samsung’s Galaxy S5 has finally gone on sale and it can be yours for €699, which is quite a lot of…

More...
Intel lists Haswell refresh parts

Intel lists Haswell refresh parts

Intel has added a load of Haswell refresh parts to its official price list and there really aren’t any surprises to…

More...
Respawn confirms Titanfall DLC for May

Respawn confirms Titanfall DLC for May

During his appearance at PAX East panel and confirmed on Twitter, Titanfall developer Respawn confirmed that the first DLC pack for…

More...
KFA2 GTX 780 Ti Hall Of Fame reviewed

KFA2 GTX 780 Ti Hall Of Fame reviewed

KFA2 gained a lot of overclocking experience with the GTX 780 Hall of Fame (HOF), which we had a chance to…

More...
Frontpage Slideshow | Copyright © 2006-2010 orks, a business unit of Nuevvo Webware Ltd.
Thursday, 23 October 2008 08:58

Amazon predicts slower than average holiday sales

Written by David Stellmack

Image

Share price falls 15 percent

Seattle, Washington-based Amazon.com announced that its end of year revenue would fall short of that predicted by Wall Street analysts, which sent its per share price hurtling downward by 15 percent in after-hours trading.  Despite reduced prices and an increased variety of products available at its online site, the distressed U.S. economy is affecting consumer purchases at online shopping mecca, Amazon.

Amazon and other retailers have indicated that consumers are being fiscally cautious with their purchases and cutting their expenses amid concerns of financial insecurity.

Sanford C. Bernstein analyst Jeffrey Lindsay said, "This is further confirmation that the economic downturn is much more pervasive than was earlier thought. Online retailers were thought to be immune to it, but this is an indication that that is far from true," he said. "They are definitely signaling much worse returns in the fourth quarter."

And to add an even more bizarre twist to the story, the U.S. dollar gained strength this week, which helps U.S. consumers, but cuts into the value of Amazon's international revenues, which currently account for 46 percent of Amazon’s total sales.

Amazon predicted net sales for Q4 of $6 to $7 billion, including its holiday sales.  This represents growth from 6 percent to 23 percent, depending on the final numbers. Amazon indicated that the downturn is causing it to proceed cautiously and cited “limited visibility” of the financial future for business as the reason.

Overall, retail spending is down across the U.S. due to the uncertainty of the economy and concerns over jobs being cut. Forrester Research issued a report this week that predicted holiday spending would grow by only 12 percent this year over 2007 (growth last holiday season was 18 percent).

Still, even small growth is still growth.  Consumers may spend less, but they will definitely shop during the holidays for gifts.  It’s a tradition they will not give up.  They may search for more bargains and purchase fewer large gift items, but most consumers will do what they can to make sure their families have gifts that they will be excited to open this holiday.

Asked how Amazon plans to manage costs should a global recession last up to two years, Chief Executive Jeff Bezos said: "We are going to continue to invest in the business, but we will be especially prudent about how we make those investments."

Last modified on Thursday, 23 October 2008 10:34

David Stellmack

E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
blog comments powered by Disqus

To be able to post comments please log-in with Disqus

 

Facebook activity

Latest Commented Articles

Recent Comments