U.S. shoppers search for last-minute holiday deals

CHICAGO (Reuters) - Procrastinating U.S. shoppers headed out to buy last-minute gifts on Wednesday, while retailers tried to put a tough holiday season behind them and began to promote sales for the days after Christmas.

Stores have kept their doors open longer and offered deep discounts to lure consumers spooked by the recession, but are not expected to salvage what may be the worst holiday shopping season in up to 40 years.

ShopperTrak said sales this past Friday through Sunday fell 5.3 percent compared with last year's weekend before Christmas. U.S. foot traffic in stores was down a whopping 23.7 percent.

Consumers who hit stores on Wednesday, the day before Christmas, said some of the deals were still not enticing enough.

Colleen Pidel, who visited Macy's, Kmart and Toys "R" Us in New York City, noticed discounts of 25 percent and thought there would be better bargains. Still, she hoped others thought the discounts were deep enough.

"I hope for the economy's sake it is," she said. "But I am not too optimistic. The economy ... it makes you not want to spend as much."

Shannon Fallon, who lives in Manhattan and works as a personal assistant for a hedge fund owner, said she looked for discounts of at least 40 percent this holiday season and has cut down drastically on buying gifts this year.

"I probably got just half as much as I would have," she said while shopping at Toys "R" Us in Manhattan's Times Square.

Tim Gearon, who stopped by an Atlanta Bed Bath & Beyond store, said he was concerned about the slow economy but added, "we live in the U.S. and we always bounce back."

Several industry watchers expect sales to fall this holiday season, which includes November and December. There has not been an annual decline in holiday sales over the past 40 years, according to consulting firm Bain & Co. Sales were flat once, in 1990.

The Standard & Poor's Retail Index closed up 1.05 percent on Wednesday after four straight days of declines.

OPENING EARLY AFTER CHRISTMAS

Taubman Centers Inc, which owns and or manages 24 shopping centers, said shoppers were buying gift cards, digital frames, toys and apparel heading into the afternoon.

Lots of parking spaces were still available just before midday at a shopping center in the Buckhead section of Atlanta. A cashier at a Toys "R" Us store in that center said things had been busier the night before. The toy store's Times Square location was crowded in the morning, though checkout lines were moving briskly.

Now that the holiday season is coming to an end, retailers are set to offer even bigger discounts to clear out fall and winter merchandise and will bring in new items to boost sales before their fiscal year ends in January.

JC Penney Co Inc is opening its stores at 5:30 a.m. on Friday, its earliest opening yet for the day after Christmas, with discounts such as 70 percent off of gold and silver jewelry.

Sears Holdings Corp's Sears and Kmart chains are also promoting big after-Christmas sales, with Sears offering as much as 75 percent off on clearance electronics.

Still, since retailers have been trying to keep better control of their inventory, shoppers who decided to wait until late December may not find what they want. Taubman said some stores at malls in Florida, Michigan and Virginia reported low inventory levels on Wednesday.

"Discounts were good in the beginning, but there is not such a good selection now, so stuff that is discounted, you don't want to buy," Fallon said.

Pidel, who was buying gifts for her 9-month-old son, plans to wait until after Christmas to buy clothes for herself.

"I've been putting off buying clothes till after Christmas, I'm hoping for (deep discounts)."

Kohl's Corp, meanwhile, is preparing for a possible deluge of returns. According to a survey issued by the mid-priced chain, 60 percent of consumers typically make a return after the holiday season.

(With reporting by Aarthi Sivaraman in New York and Karen Jacobs in Atlanta, editing by Matthew Lewis, Richard Chang)