Consumers choosing to look at other options this Holiday season NEW YORK, Dec. 10 /PRNewswire/ -- Standard & Poor's Equity Research Services' survey of consumer spending and attitudes for the Holiday season shows that the toy industry may have a sub-par showing, as shoppers opt for electronic entertainment device purchases. Standard & Poor's believes this is the result of the noticeable absence of must-have toys combined with the fallout from numerous well-publicized product safety recalls. These were among the findings from the survey conducted for Standard & Poor's Equity Research by InsightExpress. This affirms the view that toy demand will likely abate this season, as stated in S&P Equity Research's 2007 Holiday Retail Outlook and Stock Picks, published by Standard & Poor's, a leading provider of financial market intelligence. "While we don't expect toy sales to dissipate entirely, we do see consumers moving into two camps, which will determine the demand and outcome," notes Erik Kolb, Toys Analyst for Standard & Poor's Equity Research Services. Among respondents, 25% indicated they were concerned about toy recalls. In contrast, 31% of those surveyed answered that these events were of little or no concern. "A look at these barbell results confirms our belief that for a substantial number of shoppers it will be 'business-as-usual' when it comes to toy purchases, and those with concerns will look elsewhere." Standard & Poor's Equity Research believes that those retailers offering video game consoles and software will be the benefactors of the weaker toy sales. We think these items are likely to be substitutes for toys for children ages 6 and up and will lead to a modest shift in spending. "One way in which consumers may be expressing their concerns is by looking for options that aren't touched by any of the issues at the center of the recalls," says Michael Souers, Specialty Retail Analyst for Standard & Poor's Equity Research. "We think this may be good news for consumer electronic and gaming retailers. With demand far outstripping supply, the Nintendo Wii may be as close to a must-have item as there is this season. There's also noticeable excitement among gamers over a number of software releases. In our view, GameStop (GME: Hold; $61) and Best Buy (BBY: Strong Buy; $53) appear to be particularly well positioned to take advantage of this increased demand." 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. Standard & Poor's Equity Research Services believes that retail sales will be weighed down by an array of economic concerns on consumers' minds, including continued housing weakness and high energy costs. The report identifies many companies that have upside potential, along with stocks that may experience weak performance based on their current market position and exposure. Retail analysts generally consider Christmas and Chanukah to be the biggest spending holidays, accounting for approximately 25% of GAFO (general merchandise, apparel, and other store) sales. S&P Economics sees GAFO sales rising 3% to 3.5% in the fourth quarter of 2007. The analysts quoted above are Standard & Poor's equity analysts. They have no affiliation with any company they cover, nor any ownership interest in any companies 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 . 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 http://www.standardandpoors.com/. About Standard & Poor's Standard & Poor's, a division of The McGraw-Hill Companies (NYSE:MHP), 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 http://www.standardandpoors.com/. DATASOURCE: Standard & Poor's CONTACT: Jeff Sexton, Communications +1-212-438-3448 Web site: http://www.standardandpoors.com/ http://www.equityresearch.standardandpoors.com/

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