Analyst: GameStop Lost Holiday Traffic To Big-Box Discounters Like Wal-Mart

Janco Partners analyst Mike Hickey says that GameStop stores likely lost traffic during the holidays to big box retailers like Wal-Mart. Hickey suggests that highly discounted pricing on consumer products attracted shoppers away from the video game retail chain, speculating, "We think low price retailers like Wal-Mart, arguably the largest domestic video game retailer, likely took market share this holiday." Take-Two Board chairman Strauss Zelnick also recently said he believed that foot traffic was down at game stores during the months leading up to Christmas. "I can’t say that, because I can’t actually quantify it," GameStop CEO Dan DeMatteo said at the time. "But... October was strong, and [in] the first two weeks of November, our comps [year over year comparisons] are up 20 percent -- so that implies there's foot traffic... so, at least the new titles are bringing out the buyers." DeMatteo added that GameStop has an advantage as a specialty retailer, and so any evolutions in how it handles game inventory is lessened, compared to a big-box outfit where games are just a section. Hickey forecasts that despite reduced holiday traffic and economic malaise, GameStop will report in its January 6 sales results announcement that holiday sales performance met its recently-reduced fiscal Q4 2008 guidance.