Discounts abound as stores try to salvage season
Wal-Mart CEO Mike Duke said during a speech in New York City last week that a recent poll of shoppers of the world's largest retailer found an overwhelming majority are aware of the threat of higher taxes, which is leading some to cut back on holiday buying. And consumer confidence fell sharply this month, according to a survey by the University of Michigan, partly because of concerns that taxes will rise next year if no deal is reached.
In addition to economic worries, a quirk in the calendar —the holiday season is four days longer than a year ago and includes a full weekend right before Christmas — may be tempting shoppers to wait longer to buy gifts. According to a survey of 1,000 consumers conducted by the International Council of Shopping Centers and Goldman Sachs, 64.9 percent of shoppers surveyed had finished their holiday buying as of last Sunday. That's lower than the 70.3 percent during the same time a year ago.
"It's coming down to the wire," said David Bassuk, managing director and co-head of the retail practice at AlixPartners. "It's going to require retailers to be more aggressive with their promotions than they were hoping heading into the weekend."
Still, time is on stores' side. Six of the top 10 spending days for the holiday season are still ahead, including the Saturday before Christmas, which is expected to be the second biggest shopping day of the year. And last year, the final 10 days before Christmas generated nearly 24 percent of the holiday sales, according to MasterCard Advisors' SpendingPulse, which tracks spending across all payments including cash.
Stores don't typically discuss their plans for markdowns during the holiday season, but some retailers said that they remain hopeful that shoppers will spend briskly in the final days.
Macy's, which runs Macy's and Bloomingdale's stores, said it does not plan to add any unplanned discounts in the days leading up to Christmas. But the chain is planning for the first time to keep most of its stores open around the clock for the last weekend before Christmas.
"We're staying with the (promotional) calendar that we planned," said Jim Sluzewski, a Macy's spokesman.
And at Takara, a clothing and jewelry store in Oak Park, Ill., owner Takara Gudell said holiday sales were up about 3 percent this year compared to a year ago, but said brisk business is just getting started for the season.
But Gudell said she's counting on the final days to be the "big rush."
"Christmas will still come," she said.
AP Business Writer Tom Krisher in Detroit and AP Writer Ashley Heher in Chicago contributed to this report.
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