*

Walmart ( WMT ) imports 340,000 kilos of Christmas goods, down

from 1.9

million kilos in 2022

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Retailers predict smaller sales increase due to stretched

consumer budgets

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U.S. companies import 22% less Christmas goods by weight

compared with 2022

By Richa Naidu, Aishwarya Venugopal, Siddharth Cavale

Nov 5 (Reuters) - Santa Claus is not delivering as many

Christmas trees, toys and decorations to the United States this

year as in recent years, import data shows, with retailers

including Walmart ( WMT ) bringing in less holiday product ahead

of what is expected to be a so-so holiday season.

Walmart ( WMT ), the world's biggest retailer, has slashed Christmas

imports deeply, shipping at least 340,000 kilos of products

described as "Christmas" goods into the U.S. in the 12 months

ending Sept. 30, according to U.S. import data provided

exclusively to Reuters by ImportYeti.

The retailer shipped in almost three times more product, at

least 980,000 kilos, in the prior 12 months through Sept. 30,

2023, the import data shows. In the same 12 months of 2022,

Walmart ( WMT ) imported more than 1.9 million kilos of Christmas

products, from reindeer ornaments to Grinch plush toys.

A Walmart ( WMT ) spokesperson said that bill of lading data "only

paints a partial picture of what we source due to the exclusion

of data from marketplace, national brands, and domestic importer

data for private brands, among other things." The retailer's

executives will provide their holiday season outlook when the

company reports third-quarter results on Nov. 19.

Walmart ( WMT ) investor Sizemore Capital Management said Walmart ( WMT )

routinely scrutinizes data on shoppers' spending patterns,

including credit-card data. "They have done the research on

their consumer. And what they have concluded is that the holiday

season is not going to be as strong," said Charles Sizemore,

chief investment officer at the firm.

Although the holiday-product import data does not count

electronics, clothing or other general merchandise, what it

shows "is pretty obvious," he added. "If Walmart ( WMT ) is ordering

less, they are expecting sales to be tepid."

Retailers are "predicting a smaller sales increase this

holiday than we saw last year," said Gerald Storch, retail

consultant and former Target vice chairman and ex-CEO of

Hudson's Bay.

"Consumers are stretched with less money left for

discretionary purchases," he said. While total U.S. consumer

spending is up, "some commentators keep confusing total consumer

spending (including necessities like housing or healthcare) with

discretionary spending."

U.S. retail sales increased in September, supporting the view

that the economy maintained a strong growth pace in the third

quarter.

D.A. Davidson analyst Linda Bolton Weiser said the consumer

environment this year is "far from robust" and that Walmart's ( WMT )

average price point for toys is at $40.16 this season, 10% lower

than last year.

All U.S. companies - including retailers Walmart ( WMT ), Dollar

General ( DG ) and other stores - shipped in about the same

amount of Christmas-related products by weight this year as in

2023, and at least 20% less by weight versus 2022, according to

ImportYeti.

In the 12 months to Sept. 30, 2024, U.S. companies imported

about 141 million kilos' worth of product described as

"Christmas" items in bills of lading - filings that companies

must submit when imports are brought in to the country.

In the same period in 2022, companies imported about 180 million

kilos of Christmas goods, or 22% more than this year.

The U.S. National Retail Federation, which is chaired by

Walmart's ( WMT ) top U.S. executive, John Furner, said in October that

holiday spending in the last two months of the year was expected

to grow by only 2.5-3.5% versus last year, the slowest rate of

growth since 2018 when holiday sales rose 1.8%. U.S. retailers

are also expected to hire fewer seasonal workers during the

holiday months than last year.

Retailers typically order Christmas imports several months

in advance and they arrive in the United States through the

year.

Major retailers including Walmart ( WMT ) want to avoid being stuck

with excess merchandise as happened during the two most recent

holiday periods. Having too much inventory is an extremely

costly scenario that is perceived as bad news by investors in

retail companies.

Retailers, which typically purchase merchandise wholesale

from third-party vendors and suppliers, "remain cautious with

their ordering to maintain lean inventories and not have to

clear excess goods through incremental discounting," said Dana

Telsey, an analyst at Telsey Advisory Group.

To be sure, import filings reflect only what retailers are

bringing in to the U.S. Retailers also source merchandise from

local vendors and domestic importers.

Craig Johnson, president of retail consultancy Customer

Growth Partners, said it was difficult to draw conclusions from

the holiday merchandise import data. "Fewer Christmas decoration

and toy imports does not necessarily imply a slow season,"

Johnson said. He expects U.S. holiday sales to rise 4% this

year, a slower pace than last year's 4.1% sales growth.