Magazine article Editor & Publisher

Papers Deal with Retail-Sales Debacle

Magazine article Editor & Publisher

Papers Deal with Retail-Sales Debacle

Article excerpt

Getting over a Grinchy holiday

Retailers were trimming more than trees this holiday season, and the results of their weak sales could haunt newspapers in the new year like leftover fruitcake.

Retailers such as Wal-Mart Stores Inc. and Federated Department Stores Inc. cut their year-end estimates as experts pronounced the holiday sales season the worst in decades. And the deep discounts stores used in desperation to get the business they got will cost them in profits.

The retailers' poor fourth quarter could mean a slow start for newspapers this year, increasing pressure on the second half. Retail already was expected to be the softest ad segment this year: analysts are forecasting 3% to 4% growth in newspaper retail advertising for 2003, compared with as much as 8% in national and 6% in classified.

"The toughest sector I think is going to be retail," said Edward J. Atorino, who follows newspapers for Blaylock & Partners in New York. He's predicting 3.5% growth for retail, versus 5% to 6% for classified and 7.5% for national, assuming a stronger second half.

Others see retailers continuing to rely on the heavy promotions that helped salvage sales in the fourth quarter, to newspapers' benefit. …

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