Circuit City

Circuit City Stores Inc. (Richmond, Va.) has announced a 1.8 percent increase in total sales for December 2004. Domestically, same-store sales dropped 5.8 percent.

“December sales were below our expectations,” said chairman, president and ceo W. Alan McCollough. “While we continue to believe that our stores are operating more effectively than they did at this time last year, customer traffic was below last December’s levels. We recognize that we must find more effective ways to drive store traffic so more consumers can see the improvements we have made in the Circuit City shopping experience.

“Although disappointed with overall sales,” said McCollough, “we were pleased with the sales growth we saw in newer technology products, including triple-digit increases in portable digital audio products and in satellite radio, and double-digit increases in LCD and plasma displays.”

The company said it felt the overall decline in comparable store merchandise sales was driven by several factors:

* A decline in the sales of personal computers, accessories and related categories. The sales weakness, primarily in desktop computers, was exacerbated by unexpectedly aggressive promotions as some competitors and vendors appeared to take actions to reduce inventory levels.

* A decline in sales of DVD hardware. That sales weakness was driven by continued unit sales declines that reflect the high household penetration of DVD players and a decline in average retail prices.

* A decline in sales of video game hardware, software and related products, driven principally by industry-wide shortages of hardware.

* Decreases in wireless sales and in digital video service sales, driven principally by business model changes.