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Retailers push aggressive deals to lure stingy holiday shoppers

Retailers are rolling out aggressive sales earlier this holiday season to lure consumers, who are expected to keep a tight grip on their wallets.

Average shoppers are projected to spend only $9 more this season than the $740 they shelled out last year, according to a survey by BIGinsight. The National Retail Federation is predicting sales growth of 4.1 percent, compared with a 5.6 percent rise last year.

“For consumers, they’ve already figured it out. They know how much they want to spend, and they know how much they want to save,” said Kathy Grannis, a spokeswoman for the National Retail Federation.

Nationally, consumers continue to grapple with mixed signals as the economy teeters back to health. The national unemployment rate fell to 7.8 percent in September, the lowest level in more than three years. Consumer spending has also picked up, with retail sales posting their best two months since 2010.

But that hasn’t been enough to compensate for the sluggish economic recovery. The uncertainty surrounding the looming presidential election as well as the feared “fiscal cliff” of spending cuts and expiring tax breaks will likely dampen holiday spending, analysts said.

“People, earlier in the year, thought the economy would come back stronger than it did,” said Craig Johnson, president of Customer Growth Partners, a retail consulting firm. “Now, they’re saving more, they’ve gotten a little bit more cautious about their spending. We’re not going to see the kind of growth that we did last year.”

To make the most of lackluster projections, retailers, which generate 40 percent of their revenue during this season, are rushing to lock in as many sales as possible.

“The really aggressive deals are starting now,” said Trae Bodge, senior editor of, a purveyor of online coupons. “Retailers are going to be struggling to get a piece of the pie, which is pretty small this year.”

Sears and Kmart have introduced free layaway programs that extend to online purchases and Black Friday specials. Toys R Us is allowing customers to reserve popular toys ahead of time. Target and Best Buy have announced price-matching plans. And at and, shoppers in select cities can order products for same-day delivery.

“The economy continues to struggle, and what we’re seeing is that consumers are preparing earlier and earlier for the holidays, so they can pay a little bit now, a little bit later,” said Jai Holtz, vice president of financial services at Sears. “And with free layaway, it allows [consumers] to buy their Furby or TV right now.”

The early onset of holiday shopping will help boost sales, analysts said. It will also reduce the risk of retailers being left with excess inventory at the end of the season. Retailers can measure consumer interest before the season is in full swing and decide whether to buy more of an item, analysts said.

“Historically, retailers started Black Friday with tremendous amounts of inventory, hoping to blow through it all,” said Teresa McCarthy, director of the Global Supply Chain Management program at Bryant University. “Now, they’re starting earlier so they can find out very quickly exactly what’s going to sell while they still have time to get backup goods shipped from China.”

But some say all might not be lost for retailers this year. Bill Martin of ShopperTrak, a market research firm, says the 32-day window between Thanksgiving and Christmas — the longest possible gap between the two holidays — gives stores a leg up in amassing sales.

“It could represent an opportunity for retailers to convert visitors into buyers,” Martin said, adding that his organization is predicting holiday sales growth of only 3.3 percent this year.

Johnson, the retail consultant, isn’t expecting miracles.

“It’s going to be an okay Christmas,” he said. “A satisfying Christmas, but not a sparkling one.”

Abha Bhattarai covers local retail, hospitality and banking for The Washington Post. She has previously written for The New York Times, The Wall Street Journal, Reuters and the St. Petersburg (Fla.) Times.


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