BusinessDecember 19, 2016
NEW YORK -- Stores are pushing deals and incentives such as free shipping for the final week of the holiday shopping season, as new numbers show people so far are spending at a bit slower pace than last year. Retailers pared their inventories and offered more exclusive merchandise this season in a bid to avoid having to offer big discounts shoppers have come to expect...
By ANNE DÂ’INNOCENZIO ~ Associated Press
Paul Poirier shops for sales at a Target store in Wilmington, Massachusetts. Retailers are pushing promotions and other enticements for the final stretch of the holiday season as new numbers show shoppers are spending at a decent but a slightly slower rate compared to last year.
Paul Poirier shops for sales at a Target store in Wilmington, Massachusetts. Retailers are pushing promotions and other enticements for the final stretch of the holiday season as new numbers show shoppers are spending at a decent but a slightly slower rate compared to last year.Elise Amendola ~ Associated Press

NEW YORK -- Stores are pushing deals and incentives such as free shipping for the final week of the holiday shopping season, as new numbers show people so far are spending at a bit slower pace than last year.

Retailers pared their inventories and offered more exclusive merchandise this season in a bid to avoid having to offer big discounts shoppers have come to expect.

But customers seem willing to wait, so stores again are counting on last-minute buyers for the final stretch.

"This has really become a game of chicken. In that game of chicken, retailers once again were the ones who flinched," said Joseph Schmitt, director at the retail consulting firm AlixPartners.

Retail spending is up 2 percent, slightly slower than the 2.4 percent gain at this time last year, with the rate of online spending far outpacing buying at physical stores from Oct. 29 through Dec. 12, according to First Data.

The firm analyzed online and in-store payments from nearly a million merchants. The data captures about 40 percent of all card transactions in the U.S. but excludes cash.

Online sales growth was up 9 percent, and spending at physical stores was up a mere 0.1 percent. At the mid-season point, e-commerce made up about 22 percent of retail spending, up from 16 percent in 2015.

Overall, the average dollar amount spent per person for the 45-day period was $70.28, up slightly from last year's $69.34.

"It's pretty decent growth, but the average shopper is moving online," said Rishi Chhabra, vice president for information and analytics at First Data.

Gregg Omoto, an information-technology worker from Seattle, said he's been shopping more online.

"It's easier," he said. "You can tap into people's wish lists, so there's not a lot of guesswork involved."

Four of the seven categories First Data tracks showed sales growth this season: building materials, electronics and appliances, furniture and home furnishings and health and personal care. General-merchandise stores suffered the biggest sales drop -- 2.8 percent --because of deep discounts and less foot traffic. Within that category, department stores took the biggest hit, with overall sales down 8.8 percent.

While the Thanksgiving weekend usually has kicked off the holiday season, stores have been starting their sales earlier.

They also started the season with less inventory on hand than in years past.

Many hoped shoppers would have more to spend with the economy improving, lower gas and food prices and the uncertainty over the presidential election behind them.

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But many shoppers retain the habits they developed during the recession, focusing on deals and more readily using technology to find them.

Stores needed to be more aggressive with discounts, said C. Britt Beemer, chairman of the consumer-focused America's Research Group.

"Consumers are saying, 'Where is the deal?"' he said. "Retailers hurt themselves ... by not having more deals."

Stores still were aggressive. Sixty-seven percent of orders were placed online using a promotion from Nov. 1 through Nov. 30, up from 38 percent in the same timeframe a year ago, according to DynamicAction, which studied $4 billion in online consumer transactions.

For the first five days of December, 60 percent of orders were placed using a promotion, compared with 29 percent a year ago.

Shoppers are hoping for even better deals in the final stretch.

Nearly 156 million people -- or 66 percent of Americans -- plan to or are considering taking advantage of sales to complete their holiday gift lists, according to a survey released Friday by the National Retail Federation and Prosper Insights & Analytics.

The survey found more people said they planned to shop the Saturday before Christmas than those who aimed to shop over Thanksgiving weekend in an earlier survey.

Still, given the quirk in the calendar that makes last weekend the last full weekend before Christmas, retailers including Best Buy, Gap and J.C. Penney have set an earlier deadline to order holiday gifts this year, according to StellaService, which tracks online services at retailers.

Wal-Mart, along with others, is encouraging online shoppers to pick up their merchandise at the store.

Target will offer last-minute shoppers deals that are good only for a day on certain in-demand products such as children's sleepwear and fragrance sets.

Still, plenty of shoppers plan to take their time.

Christine Bunker Tobia of Queens said she mostly shops at Macy's but likes to wait to get the best deals.

She's been stopping by Macy's New York Herald Square store often to check the prices.

"I'm looking for a special sale," she said.

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