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S&P Equity Research Sees Shift to Online Holiday Shopping Intact in 2007
Dec 12, 2007 (12:12 PM EST)


NEW YORK, Dec. 12 /PRNewswire/ -- According to a recent Standard & Poor's Equity Research Services survey, 40% of consumers will dedicate more of the increase in their 2007 holiday spending to the Internet than to any other channel. This is coupled with the finding that among those polled, 70% planned to do at least a portion of their shopping online. Participants' responses further revealed that 22% of holiday shopping in 2006 was done online. The results of the survey conducted by Standard & Poor's, a leading provider of financial market intelligence, also showed that online features such as product search, comparison shopping sites and product reviews influence holiday shopping more than online dollars spent would suggest.

"We believe responses to our survey highlight the continued acceptance of and comfort with the Internet for gift purchases, and shopping overall," says Mark Basham, Consumer Discretionary Retail Analyst for S&P Equity Research Services. "Online retailers are commanding more dollars and a greater part of the holiday spend. They've responded and are feeding into this by giving customers more reasons to shop online, including promotions specifically for shipping."

According to a recent National Retail Federation (NRF) study, two-thirds of online retailers indicated consumers needed to place their orders by December 18 to receive standard delivery orders by Christmas. At the same time, three-quarters of retailers polled in a Fall 2007 Shop.org/Shopzilla survey planned free standard shipping promotions up until this date. Standard & Poor's believes this perk will be a significant sales driver as the online holiday shopping season enters its key seven-day stretch that ends with its climax on December 18.

"Online sales have become a key part of the retail landscape, particularly during peak selling times, such as the holiday season," notes Marie Driscoll, Director of the Consumer Discretionary-Retail Group for Standard & Poor's Equity Research Services. "Overall, online retail sales account for approximately 6% of total retail sales, and are steadily increasing market penetration. Among traditional retailers, we're seeing the Internet or direct channel providing significant growth and branding opportunities, as it achieves 20% or more year-over-year sales gains."

Despite notable economic uncertainty, Standard & Poor's Equity Research projects that U.S. online retail sales will increase a healthy 17% in 2007, and 15% in 2008. "These forecasts reflect how powerful the appeal of online shopping has become," says Scott Kessler, Internet Retail Analyst for Standard & Poor's Equity Services. "We believe that consumers are attracted to the online shopping experience because it offers significant information, expansive selection, considerable convenience, and substantial values. As a result, companies such as eBay (EBAY: Strong Buy; $34) and Apple (AAPL: Buy; $189) have benefited."

Standard & Poor's Equity Research Services' survey of consumer behavior and attitudes was conducted during November 2007 by InsightExpress. The survey sample consisted of 1,100 respondents throughout the U.S. to an online

survey consisting of approximately 25 questions regarding their holiday spending plans as well as their outlook for early 2008.

S&P Equity Research's 2007 Holiday Retail Outlook and Stock Picks was released in November 2007. The report examines the trends within the consumer discretionary retail industry for the holiday season, and discusses the potential outcomes.

The analysts quoted above are Standard & Poor's equity analysts. They have no affiliation with any company they cover, and no ownership interest in any company they cover.

Members of the media can request a copy of S&P Equity Research's 2007 Holiday Retail Outlook and Stock Picks by contacting Jeff Sexton at 212-438- 3448, or via e-mail to jeff_sexton@standardandpoors.com.

About Standard & Poor's Equity Research Services

As the world's largest producer of independent equity research, Standard & Poor's licenses its research to over 1,000 institutions for their investors and advisors, including 19 of the top 20 securities firms, 13 of the top 20 banks, and 11 of the top 20 life insurance companies. Standard & Poor's team of 120 experienced U.S., European and Asian equity analysts use a fundamental, bottom-up approach to assess a global universe of approximately 2,000 equities across more than 120 industries worldwide. Follow Standard & Poor's equity analysts' U.S. market commentary each day at http://www.equityresearch.standardandpoors.com/ .

The equity research reports and recommendations provided by Standard & Poor's Equity Research Services are performed separately from any other analytic activity of Standard & Poor's. Standard & Poor's Equity Research Services has no access to non-public information received by other units of Standard & Poor's. Standard & Poor's does not trade for its own account. The analytical and ethical conduct of Standard & Poor's equity analysts is governed by the firm's Research Objectivity Policy, a copy of which may also be found at www.standardandpoors.com .

About Standard & Poor's

Standard & Poor's, a division of The McGraw-Hill Companies http://www.standardandpoors.com , is the world's foremost provider of financial market intelligence, including independent credit ratings, indices, risk evaluation, investment research and data. With approximately 8,500 employees, including wholly owned affiliates, located in 22 countries, Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for more than 140 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit .

CONTACT: Jeff Sexton, Communications Tel.: 212-438-3448 Jeff_Sexton@standardandpoors.com

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