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Associated Press
Fewer people were in and out of stores during the holidays, but more shopped online. Online shopping rose 10 percent.

Retailers pressed to adapt

Amazon, Wal-Mart take divergent paths for holiday shoppers

– The financial strains and shifting shopping habits of Americans have led to uneven fortunes for retailers.

Traditional consumer companies like Wal-Mart and Mattel have continued to struggle as Americans spend more cautiously in the uncertain economy. But Amazon.com has flourished as shoppers increasingly buy online rather than head to stores.

The trend was evident during the pivotal holiday shopping season, a time roughly from November through December when many retailers can make up to 40 percent of their annual revenue. Overall, government figures show that spending during October through December rose at the fastest clip in three years.

But exactly where – and how – Americans spent their money during the final months of the year shifted. Fewer people were in and out of stores during the holiday season, but more were shopping online.

Online shopping rose 10 percent to $46.5 billion in November and December, according to research firm Comscore. Meanwhile, sales at stores rose just 2.7 percent to $265.9 billion, according to ShopperTrak, which tracks data at 40,000 U.S. stores. The number of customers in stores dropped 14.6 percent.

“Consumer behavior evolved quickly, as retail foot traffic fell, while online purchases grew,” Mattel’s CEO Bry an Stockton said.

Mattel, the world’s largest toymaker, announced that results for the quarter that included the holiday shopping season missed both analysts’ estimates and the company’s own expectations due to weak sales of Barbie and other toys.

“From my perspective, the 2013 holiday period has to be one of the most transformative I have seen,” Stockton said.

Wal-Mart Stores Inc. also expects disappointing results. On Friday, the world’s largest retailer said its fiscal fourth-quarter and full-year adjusted earnings from continuing operations may come in at or slightly below the low end of its prior forecasts.

Wal-Mart is among 33 major retailers that have lowered their outlooks for the fourth quarter and beyond, mostly because of the disappointing holiday shopping season, according to Ken Perkins, president of RetailMetrics LLC., a research firm.

“A highly competitive environment is going to be staring (retailers) in the face throughout the course of 2014. The pressure and competition are not going to abate at all,” Perkins said.

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