December 16, 2008 / 5:44 AM / 11 years ago

Consumers fall behind on shopping: NRF

NEW YORK (Reuters) - Despite U.S. retailers’ parade of deep discounts and limited-time deals, the average consumer has completed much less holiday shopping by this point in the season than in previous years, according to a survey released on Tuesday by the National Retail Federation.

Shoppers carry bags as they walk down Fifth Avenue in New York, December 6, 2008. REUTERS/Chip East

The NRF survey found that people had finished about 47.1 percent of their holiday shopping by the second week of December, or nearly 10 percent less than last year.

The survey also said 41.2 million people had not yet started holiday shopping, up from 35.1 million last year.

This consumer procrastination is showing up at the cash register, with sales at chain stores open at least a year falling 0.4 percent in the week ended December 13 from a year ago, according to the International Council of Shopping Centers and Goldman Sachs weekly sales index. Total chain store sales increased 0.6 percent compared with the prior week.

“As holiday shoppers drag their collective feet on holiday-spending completion, this seemingly is further depressing the year-over-year pace of sales,” the ICSC said in a note.

The data come as retailers, facing what could be the weakest holiday shopping season in nearly two decades, have been slashing prices to entice spending.

Currently, AnnTaylor Stores Corp’s LOFT chain is touting a buy one item, get one free promotion, while department store operator Kohl’s Corp is offering 50 percent to 60 percent off winter coats.

The delay comes from consumers seeking steeper price cuts closer to Christmas and from a shortened holiday shopping period, NRF spokeswoman Ellen Davis said

There are five fewer days between Thanksgiving and Christmas this year compared with last year. Christmas is sneaking up on consumers who shopped during the Thanksgiving weekend but have since taken a breather, Davis said.

“The economy is the overriding factor of the holiday season this year,” she said. “And the shorter holiday is throwing an extra wrench in things.”

AVOIDING CREDIT CARDS, FAVORING CASH

The NRF survey also showed customers are trying to stick to their budgets by avoiding credit-card fueled splurges. Two-thirds of shoppers said they have primarily used cash, debit cards, or checks to pay for holiday purchases, up from 64.5 percent last year.

While gift cards are the most requested gift for the holidays, the NRF survey found only 24.3 percent of shoppers have purchased gift cards this holiday, down from 30.2 percent who had done so by this time last year.

In a sign that consumers are taking a more practical approach to the holidays, Wal-Mart Stores Inc released data from a separate survey showing that shoppers may look to use holiday gift cards for everyday needs, such as groceries.

Wal-Mart’s survey of female shoppers found nearly 70 percent of respondents would like to receive gift cards so they could choose their own gifts. Nearly half of those asked said they would like gift cards for groceries.

Starting this week, the retailer said it would offer shoppers bonus gift cards when they purchased select items. For instance, a shopper buying a Sony Blu-ray DVD player at Wal-Mart for $298 would also receive a $50 bonus gift card.

Those so-called bonus gift cards could help shoppers stick to their limited budgets. Wal-Mart said that nearly 30 percent of those asked said they would consider re-gifting such a bonus gift card.

Wal-Mart said its survey, conducted by BIGresearch, polled more than 300 women across the country this month. The respondents had shopped at Wal-Mart over the past three months.

The NRF said its survey, also conducted by BIGresearch, polled 8,860 consumers between December 2 and December 9.

Editing by Leslie Gevirtz and Gerald E. McCormick

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