* Saturday before Christmas is typically huge for retailers
* Pulling out all the stops to woo last-minute shoppers
* Consumers feeling more uncertainty as "cliff" nears
* 60 pct of shoppers done with most holiday shopping -poll
By Dhanya Skariachan and Phil Wahba
NEW YORK, Dec 22 Fears about imminent tax hikes
and cuts to government spending are taking a toll on U.S.
shoppers and could deprive retailers of a strong finish to the
2012 holiday shopping season.
The acrimonious debate in Washington over how to avoid the
so-called fiscal cliff has cast a pall over shopper sentiment,
retail experts say, as consumers head to the malls on the last
Saturday before Christmas - typically one of the busiest
shopping days of the year.
Talks to avoid the fiscal cliff stalled on Thursday when
Republican lawmakers rejected House Speaker John Boehner's
proposal aimed at winning concessions from President Barack
"The longer Congress delays making a decision on the fiscal
cliff and the more uncertainty people feel, as we go toward
Christmas, they would start pulling back on their spending,"
said Ron Friedman, retail practice leader at consulting firm
Marcum LLP. "I don't think we're going to get a great pickup in
the last few days here."
About 17 percent of the 1,514 Americans who participated in
a Reuters/Ipsos poll conducted Dec. 17-20 said the impending
"fiscal cliff" was making them spend less this season.
U.S. consumer sentiment also plummeted in December as
Americans were unnerved by ongoing negotiations, data showed.
The Thomson Reuters/University of Michigan's final reading
on the overall index on consumer sentiment tumbled to 72.9 from
82.7 in November, worse than forecasts for 74.7. It was the
lowest level since July.
"What could have been a merry Christmas is going to turn to
a ho-hum Christmas, and we can thank our, you know, politicians
for getting in the middle of it all," NPD analyst Marshal Cohen
said. "It is like this great unknown puts a big damper on the
consumer feeling confident to go out and spend more."
More than 60 percent of U.S. consumers have already finished
more than three-quarters of their holiday shopping, according to
a Reuters/Ipsos poll released on Thursday. This means retailers
will have to offer deeper discounts to force Americans to open
their wallets in the last lap of the holiday season.
The holiday quarter can account for about 30 percent of
annual sales and half of profit for many chains, and experts
including Cohen and Friedman see retailers pulling out all the
stops this weekend and the week ahead to woo last-minute
"The only way retailers now are going to be able to get a
boost is by creating their own stimulus package, and that
stimulus package is going to be markdowns," Cohen said.
Earlier this week, research firm ShopperTrak lowered its
sales forecast for November and December and now expects sales
to be up 2.5 percent, rather than up 3.3 percent.
Many retailers reported record traffic at the beginning of
the season, but several, including Macy's Inc and Saks Inc
, lost a lot of business because of Hurricane Sandy.
Earlier this week, Redbook Research said chain-store
same-store sales rose 2.2 percent so far in December, suggesting
shoppers are indeed cooling their heels. Sales for the
November-December holiday season look set to rise 4.1 percent to
$586.1 billion this year after a 5.6 percent increase in 2011,
according to a National Retail Federation forecast.
"Retailers are going to be pretty challenged this year in
trying to get beyond all this," Cohen said, referring to a
string of events this holiday season that have weighed on U.S.
shoppers including the hurricane, gridlock in Washington and a
recent shooting at an elementary school in Connecticut.
NRF sees 2013 retail sales rising about 2 to 2.5 percent if
the fiscal cliff is averted. If not, sales would be essentially
flat for the year, the trade group estimated in a study with
(Editing by Matthew Lewis)