Deflation Persists in Major Holiday Categories for Fifth Year in a Row.

NEW YORK -- Ernst & Young

WHAT: In sharp contrast to the Consumer Price Index (CPI), the
          five major holiday categories--consumer electronics, toys,
          apparel, jewelry and sporting goods--have been predominately
          deflationary for the past five years, according to the
          latest Ernst & Young Quarterly Market Basket. Only sporting
          goods, inflationary in 2000, and jewelry, inflationary in
          2001, have countered this trend.

          "This ongoing deflation underscores the tremendous strength
          of mega- retailers and their reluctance to raise prices,"
          says Jay McIntosh, Americas Director of Retail and Consumer
          Products for Ernst & Young LLP. "In some categories - such
          as consumer electronics and apparel - lower-priced goods
          from Asia are also a factor. But overall, consumer products
          manufacturers continue to be challenged by their inability
          to get price increases from retailers."

          According to the report, toys, at -4.8%, is the most
          deflationary category this holiday season as well as for the
          past five years, during which time toy prices have fallen
          20.7%. Jewelry, at -1.9% for the season and -9% for the past
          five years, is the second most deflationary category. By
          comparison, the CPI has grown 9.5 % for the same period.

          The Ernst & Young Quarterly Market Basket, which is based on
          components of the Consumer Price Index, compares prices in a
          five-year period, cutting out inherently inflationary items
          such as shelter, transportation, and medical care. With
          those sectors removed, the trends in inflation and deflation
          related to holiday purchases such as toys, apparel, consumer
          electronics, jewelry and sporting goods become much more
          apparent.

          McIntosh is available to discuss:

          --  Factors influencing deflation in the five major holiday
              categories

          --  Trends and hot products driving sales in the five
              categories

    WHO:  Jay McIntosh is Americas Director of Retail and Consumer
          Products for Ernst & Young LLP. He is responsible for the
          group's strategy, quality initiatives, thought leadership
          and for developing and overseeing relationships with many of
          the largest and best-known retail and consumer product
          companies throughout the Americas.


           FOR MORE INFORMATION OR TO SCHEDULE AN INTERVIEW
                      WITH JAY McINTOSH CONTACT:
           Wendy Hirschhorn 212/826-8790 [e-mail]