Santa Skips Circuit City

Given the wares it peddles, Circuit City (NYSE: CC) is one of those companies you might think would do some decent December sales. Of course, some of us might have thought better of that hypothesis, given recent history, and today, those concerns were borne out -- it appears that many holiday shoppers skipped the electronics retailer.

Overall December sales at Circuit City were up a scant 1.8% to $1.75 billion. Same-store sales fell 5.8%, with same-store sales here in the U.S. a particular bummer, down 3.7%. In its statement, the company's CEO admitted that store traffic was below the levels seen last December.

Circuit City's struggles are made apparent by this piece of data, as popular electronics theoretically should have created a catalyst for holiday sales. Between Apple's (Nasdaq: AAPL) iPods and other portable audio devices, high-definition and plasma TVs, digital cameras, and other popular electronics, you can't help but contemplate who was providing the goods.

Who, indeed. There's quite a list, including the mighty Best Buy (NYSE: BBY), as well as discounters like Costco (Nasdaq: COST) and Wal-Mart (NYSE: WMT). It's also clear that shoppers are increasingly rejecting crowds and browsing online for electronics, with Amazon.com (Nasdaq: AMZN) and Overstock.com (Nasdaq: OSTK) likely suspects for stealing electronics shoppers, as well.

Circuit City has been cooking up initiatives to boost its competitive positioning, but I will say that when I recently went along with my roommate on a shopping trip for her new laptop (I figured a peek at the process might make some good homework for takes like this one), my comparison of the customer service at the Apple Store, Best Buy, and Circuit City found Circuit City dead last when it came to being savvy about the products and exhibiting good, old-fashioned salesmanship. I've also received plenty of mail from readers in the past who expressed their own likelihood of shopping at stores other than Circuit City for their electronics needs. 

All right, though, enough of the anecdotal evidence. There were already clues that Circuit City might not pull a holiday victory this year, given Fool Seth Jayson's recent take -- which included word of disappointing post-Thanksgiving sales.

Circuit City has been a bit of a seesaw, with occasional glimmers of hope that it is improving. Indeed, some investors may find themselves tempted to hope for a long-term turnaround, but if they do, they're setting stock on a company that faces an uphill battle with some mighty formidable competitors.

Best Buy, Costco, and Amazon.com are Motley Fool Stock Advisor picks. Overstock.com is a Motley Fool Rule Breakers stock. When searching for stock selections that match your own investment philosophy, there's something for just about everyone in our suite of newsletters.

Alyce Lomax does not own shares of any of the companies mentioned.