Dec. 17--Debbie Rohrwasser wants no part of the mad rush through stores in the final week of Christmas shopping.
She went to great ends to avoid crazed last-minute shopping when she scouted out prices just before Thanksgiving and then spent the holiday weekend "power shopping" with her daughter, who was home from college. The goal, said Rohrwasser, was to be done with shopping and have a calm period prior to Christmas at her Palatine home.
"I want to spend time with my family and roast chestnuts," she said.
Yet roasting chestnuts on an open fire, and the idyllic calm it represents, is still on hold for most holiday shoppers as they scurry to finish shopping and retailers compete for shoppers in a season of deep discounts.
Only 10 percent of holiday shoppers surveyed by the National Retail Federation said this week that their shopping is complete. The average holiday shopper has completed only 53.5 percent of his or her shopping so far, and 44.8 percent of shoppers are still trying to figure out what to buy. About 22 percent are still waiting for the best deals of the holiday season.
The deals already abound. In fact, retailers have been dropping their prices more than usual since October and are slashing them sharply throughout this holiday season as online and brick-and-mortar stores battle for business in a highly competitive environment, according to analysts. For October, the Bureau of Economic Analysis index of general retail prices was 2.9 percent lower than a year earlier.
During the holiday shopping season the volume of purchases is up, but stores are making less money than expected because they've cut prices so deeply, said Jack Kleinhenz of the NRF.
"Fewer dollars are coming in than expected," he noted.
Stores are under pressure from excessive inventory -- a result of a West Coast port labor dispute that held up shipments earlier this year, he noted. In addition, consumers are still heavily focused on price as wages remain stagnant and rents and health care costs are burdens, he said. Adding to the competitive pressures already imposed by competition from online retailers, stores are finding that consumers are spending heavily on restaurants and travel -- limiting some retail spending.
About 22 percent of people surveyed by the NRF said they were planning to give an experience-type gift (like a trip or entertainment), and 36.5 percent said they would like to receive such a gift.
Warm weather has been a curse for typical winter gifts such as sweaters and coats.
"Seasonal inventories of coats, boots and sweaters are high," noted Cowen and Co. analyst Oliver Chen on Thursday. "Warm weather combined with weak traffic is likely causing more markdowns and subsequently deeper markdowns than planned." He identified too much product at Macy's, Gap, Abercrombie and Nordstrom.
While many stores are displaying signs on storefronts advertising 50 percent off on everything in the store, Chen notes 60 percent off on select cold weather accessories.
Kohl's, for example, on Saturday is offering $69.99 Tek Gear Hazel Puff Boots for women for $19.99 and Columbia Timberline Triple Interchange Jackets for men at $149.99. This "last-minute gift" was originally $230.
Apparently to plant the idea that people this time of year typically are motivated by cold weather, H advertised through Twitter this week: "Get ready to do some serious shopping to keep you warm this winter." The retailer is offering a 60 percent discount on some items in its store.
Chen said stores such as Victoria's Secret, Pink, Bath Body Works and Ulta have been able to avoid sharp discounting, at least in part, because they are insulated from warm weather pressures.
Many of the busiest shopping days of the year have passed, but with the last week remaining before Christmas, retailers are cutting prices more and offering other inducements so they can capture the remaining spending of the season. Target, for example, is emphasizing a cutoff of Dec. 21 for free delivery before Christmas and a "10 percent off" gift card promotion for only one day on Sunday.
Sears next week is offering customers 20 percent off if they spend at least $50. And Sears, like many stores, is adding more hours of shopping. Kohl's announced it will keep its doors open for more than 170 hours straight from 7 a.m. Thursday through 6 p.m. Christmas Eve.
ShopperTrak ranks Friday as the second-busiest shopping day of the year, second only to Black Friday. Saturday and Sunday are in the top eight busiest days, and the day after Christmas is the 10th busiest.
Retailers know they need to "drop prices to keep products moving off the shelves," Kleinhenz said. The bottom line: "Lower prices might be bad news for retailers, but they are good news for retailers' customers."
gmarksjarvis@tribpub.com
