Final Christmas Shopping Rush On

A woman passes an advertisment for a sale on a street in New York as she exits a store on the day before Christmas Saturday, Dec. 24. Shoppers were out on the streets in New York early Saturday, with just one day left to make up for shopping time lost during the city's transit strike.
AP
Retailers love when Christmas falls on a Sunday. They're hoping that last-minute shoppers will make the most of their Saturday to make up for a relatively lackluster holiday retail season.

There could be an early surge of procrastintors, especially if there are a number of Christmas Eve deals. Savvy consumers have learned they may get better deals from merchants if they wait long enough.

"This is going to be an incredibly busy shopping day for retailers, perhaps the busiest Christmas Eve we've ever had," Scott Krugman of the National Retail Federation told CBSNews.com's Lloyd de Vries. "As many consumers are not working, they're probably going to be out in the malls"

Krugman said Christmas Eve traditionally is not a big shopping day as consumers usually have other obligations.

"Typically, Christmas Eve falls out on a weekday, when most consumers are at work. Then they try to sneak in some shopping just before the end of the business day. With Christmas Eve falling out on a Saturday, they really have the full day to finish up all their shopping"

And with no major "must-have" gift driving sales, analysts say procrastination is the theme of this holiday shopping season. Surveys by America's Research Group and a shopping mall trade group have found that only a quarter of households completed their holiday shopping by last weekend, compared to about a third last year.

Retailers can blame the calendar. They can blame the weather. They can even try to blame New York City's transit strike. But in the end the 2005 shopping season may just be another case of merchants not giving shoppers what they really want — must-have items at reasonable prices.

In addition, higher heating fuel and gasoline costs have added to consumers' burdens, even though unemployment is relatively low and personal income has been rising.

Gadgets, like Microsoft Corp.'s Xbox 360 videogame console, new sleeker versions of the Apple Computer Inc.'s iPod digital music players and flat-screen TVs, have helped draw crowds to electronics stores like Best Buy Co. Inc. and discounters such as Wal-Mart Stores Inc. and Target Corp.

Online retailers also have enjoyed a robust holiday season, with non-travel online spending up 24 percent, according to comScore Networks Inc., an Internet research company. Online merchants saw a surge late in the season, with sales soaring 29 percent for the week ended Dec. 18 compared to the same period a year ago.

Retailers — both online and on land — worked hard to jump-start the season a few weeks earlier than a year ago with enticing discounts, free shipping deals and advertising campaigns, although most retailers haven't reacted with a frenzy of bargains beyond what was in their strategy.

"This year, it is more about stores' trying to manage their business, their inventories and markdowns," said Marshal Cohen, chief analyst at NPD Group Inc., a market research firm based in Port Washington, N.Y. "They're also recognizing a second holiday season, which begins Dec. 26."

Michael P. Niemira, chief economist at the International Council of Shopping Centers, says the final hours before Christmas and next week will be "big." He believes that merchants will still wind up with a modest 3 percent to 3.5 percent increase for the November-December period.

The estimate is based on same-store sales, which are sales at stores opened at least a year. But Niemira added that if more shoppers than expected redeem their gift cards next week, that could boost December sales by 0.75 percentage point.

Stores such as KB Toys Inc. and Coach Inc. will be showcasing some new merchandise after Christmas for shoppers who will redeem their gift cards or plan to spend on themselves. Gift card sales — expected to rise 6.6 percent this season, according to the National Retail Federation — are only recorded when shoppers redeem them, leaving some hope that retailers can preserve profits this year.

Christmas Eve — normally a time when shoppers focus on family celebrations —could be the real wild card this year. The urge to put more under the Christmas tree may overcome the desire to get a bargain.

"I'll probably be here Christmas Eve," said Teresa Lagunas of Los Angeles, who was at the local Burbank Town Center mall on Thursday.

Don't expect Townsend in the Dayton Mall on Saturday, however.

"I refuse to shop on Christmas Eve. But that's when my husband starts," she said.