Holiday Shoppers Waiting Until the Last Minute - Again

If you had any doubts that retailers would have to offer big discounts to bring shoppers into their stores, consider this: Well into the eight nights of Hanukkah and with only one more weekend to go before Christmas, nearly half of us aren't even halfway through our holiday shopping. Nearly one-fifth of Americans haven't crossed even one name off their gift lists.

A survey by the National Retail Federation, the industry's trade group, found shoppers have done on average 46.7% of their holiday shopping by the second week of December. That's even less than last year -- when consumers were still shell shocked by the stock market's freefall and the implosion of the mortgage industry. In fact, it's the lowest percentage since 2004, according to the NRF's data.

Worse yet, 19.1% of consumers hadn't even started last weekend and 11.9% expect to finish on Christmas Eve. Only 8.6% of us have finished already, and 35% plan to finish Saturday, Dec. 19.

This is not news to retailers, who have seen shoppers put off their purchases later every year. They worry that customers are now conditioned to play chicken, trying to wrestle stores for the largest possible markdown.

When November sales figures initially disappointed -- the Black Friday sales in particular -- retailers tried not to panic and chalked it off to procrastination.

"We expect Christmas will come late again this year, a trend we've seen over the last years," is how Best Buy (BBY) CEO Brian Dunn put it while reporting his third-quarter results. His stores saw strong November traffic and heavy Black Friday sales, but also saw margins shrink because of the same price drops and promotions driving that traffic.

So the game of chicken continues, and many stores plan to accommodate those procrastinators with late hours. Macy's (M) will open a number of stores around the clock in the New York and Philadelphia metro areas beginning Dec. 21. Toys 'R" Us plans to open stores until midnight -- and some until 1 a.m. -- through Dec. 23 so parents can shop after the kids fall asleep. Its flagship in New York's Times Square will be open around the clock Dec. 19 through 8 p.m. on Christmas Eve.

But it is the discounts that will drive shoppers. The NRF's survey found discount stores tied department stores as the most popular retailers for holiday shopping; both were named by 42% of shoppers in the poll. As we've reported before the "new frugality" is no mirage. With double-digit unemployment rates, 'tis the season to be scrimping.

And retailers keep playing that up, and stepping it up as Christmas draws near. Sears Holdings (SHLD) has been out promoting Black Friday prices every weekend at Sears stores. Family Dollar Stores (FDO) pulled the season's two trends together to promote $5 toys and gifts "for present procrastinators."

So retailers are making hay out of the same situation they complain about. In a year when even the brightest holiday sales forecast is a squeaker, nobody wants to leave sales on the table because they misread what the market would bear. As the saying goes: if you can't beat them, join them.
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