Stores pull all-nighters, striving to save season

NEW YORK — The nation's stores are pulling all-nighters and deepening discounts in the final hours before Christmas, trying to draw in all the shoppers they can as they face dismal sales in what will likely end up as the worst holiday season in decades.

As much as retailers do, however, analysts say the crowds appears to be lighter this week than a year ago — heightening worries about the survival prospects for many merchants.

In Christmases past, the retail industry has depended on last-minute shoppers, along with those pulled in by 24-hour shopping options, to help save the season. But this year, customers worried about their jobs and retirement funds have been pulling back their spending.

A lot is at stake. The holiday shopping season accounts for as much as 40 percent of annual profits for many retailers, and the earnings outlook is growing more dire every week.

"The question that we are really trying to answer is how bad was the season," said Michael P. Niemira, chief economist at the International Council of Shopping Centers. He now expects that sales at established stores for November and December will be down 1.5 percent to 2 percent — making it the weakest holiday season since at least 1969, when the index began.

Excluding Wal-Mart Stores Inc., which is among the few bright spots, same-store sales are expected to fall from 6.5 percent to 7 percent. Same-store sales are sales at stores opened at least a year and are considered a key indicator of a retailer's health.

Meanwhile, ShopperTrak RCT Corp., which measures traffic and total retail sales at more than 50,000 outlets, said Tuesday that total sales for the Saturday before Christmas were up 0.5 percent, while customer count dropped 17 percent compared with a year earlier. The Saturday before Christmas is expected to be the second-biggest day of the season.

But the holiday season was essentially over before the end of the Thanksgiving weekend for many merchants, as they were forced to offer marathon shopping hours and big discounts throughout November. Markdowns have only gotten deeper since then.

And if shoppers thought stores were practically giving away the merchandise before, deals are only expected to get better after Thursday, particularly on items such as outerwear. Merchants including AnnTaylor Loft were already sending out e-mails to customers Tuesday, promoting after-Christmas discounts that can be enjoyed now.

Despite such come-ons, many shoppers aren't in a big rush.