NEW YORK — When it comes to fat holiday discounts, better late than never.
This holiday shopping season, many stores haven't been offering the same blockbuster deals as they did last year. Instead, they've dangled offers of free shipping and no-fee layaways to lure shoppers.
But during the final weekend before Christmas, shoppers should expect to see more "70 percent off" and "buy one, get one free" signs as stores try to salvage a season that, so far, has been disappointing.
Teen retailer Aeropostale has slashed prices on everything in its stores by 60 percent. Rival teen chain American Eagle Outfitters is offering 40 percent off all purchases. Saks Fifth Avenue is cutting prices on some designer clothing up to 60 percent. And Children's Place, a children's clothing chain, is offering up to 75 percent off on its website.
The price slashing may be good news for shoppers, but it hurts stores. Their profits likely will suffer in their last-ditch effort to boost sales during the two-month holiday shopping period, a time when they can make up to 40 percent of their annual revenue.
To be sure, stores have been offering discounts throughout the season, but they resisted the blockbuster deals that ate away at profits last year. In fact, promotions and other discounting efforts were down 5 percent through Dec. 10 compared to last year, according to BMO Capital Markets, which tracks promotions at about two-thirds of mall stores. But sales have been slow, so stores will have to rely even more on the final days before Christmas to make up the difference.
ShopperTrak, which counts foot traffic and its own proprietary sales numbers from 40,000 retail outlets across the country, said Wednesday that the number of shoppers in stores for the week that ended Saturday fell 4.4 percent from the year-ago period, while sales declined 4.3 percent. As a result, the company said it would slash its sales forecast to a 2.5 percent increase, down from the 3.3 percent growth it had initially predicted.
And online sales, which have been seen as a beacon during the season, have been below expectations, too. Online sales are up 13 percent, to $35 billion, from Nov. 1 through Dec. 16, according to comScore, an online research firm. That pace is below the forecast of 17 percent for the season.
"It feels like the steam is out of the holiday since Black Friday," said Bill Martin, ShopperTrak's co-founder.
Wal-Mart CEO Mike Duke said during a speech in New York City last week that a recent poll of shoppers of the world's largest retailer found an overwhelming majority are aware of the threat of higher taxes that will come if a budget deal isn't worked out in Washington, which is leading some to cut back on holiday buying.
Still, time is on stores' side. Six of the top 10 spending days for the holiday season are still ahead, including the Saturday before Christmas, which is expected to be the second-biggest shopping day of the year. And last year, the final 10 days before Christmas generated nearly 24 percent of the holiday sales, according to MasterCard Advisors' SpendingPulse, which tracks spending across all payments including cash.