December 27, 2002, 10:01 AM — Despite reports that this has been the worst holiday shopping season in years, online retailers such as Amazon.com Inc. and MSN Shopping cited strong holiday sales Thursday.
In fact, Seattle, Washington-based Amazon said that it had the busiest shopping season ever, with more than 56 million items ordered from Nov. 1 to Dec. 23, 2002. Furthermore, Microsoft Corp.'s MSN network reported US$10.7 billion in sales for the fourth quarter of this year, with a 50 percent increase in traffic compared to the same period last year.
Both e-tailers said that apparel, consumer electronics, books and toys topped shoppers' holiday lists.
But despite the reported surge in online shopping, shares of Amazon took a beating early Thursday, slumping almost 10 percent after offline retail giant Wal-Mart Stores Inc. cut its December sales forecast due to the continued economic downturn.
Although the retailers are not directly related, investors feared that a sharp slowdown in brick-and-mortar sales would spell a decline in online sales as well.
Web retailers did not feel the same, however.
"This season, holiday shopping has become an even more valuable service for holiday shoppers than ever before," Jim Barr, general manager of commerce services at MSN, said in a statement. Barr cited convenience, selection and low prices as drivers of online shopping growth.
And online retailers may be right. Earlier this week, comScore Networks Inc. said that online shopping for the week before Christmas hit $1.9 billion, a 19 percent increase from the same period last year.
It remains to be seen, however, how the season will wind up once the post-Christmas shopping figures roll in.
In the meantime, investors are taking a cautious view. Shares of Amazon (AMZN) fell 7.22 percent to $20.30 in afternoon trading Thursday, while shares of Microsoft (MSFT) dipped 0.8 percent to $53.39.