Retailers make early holiday push to lure skittish shoppers

Article by: CORILYN SHROPSHIRE , Chicago Tribune
Updated: September 22, 2012 - 9:48 PM

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Christmas trees are pulled into position at a new Walmart.

Photo: Glen Stubbe, Star Tribune

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September had barely started, but that didn't stop retailers from talking Christmas: Wal-Mart said it would kick off its holiday layaway promotion just two weeks after Labor Day -- a full month early. A few days later, Toys 'R' Us and Kmart said they would do away with layaway fees altogether.

One might say they were late to the holiday party. A Neiman Marcus in Oak Brook, Ill., debuted a decked-out display of Christmas collectibles and holiday decor in August.

Fretting that an upcoming presidential election, rising energy and food costs as well as ongoing job fears could cause skittish consumers to tighten their purse strings, retailers are drumming up ways to convince them to shop early and often.

They'll spend the next few months vying for shoppers' attention and dollars, aiming to drive all-important holiday sales, which make up roughly 25 percent of their yearly profits.

By kicking off promotions while it's still hot outside, retailers are making a calculated move to stay in front of consumers and lock in their loyalty early, say retail experts. Early estimates from ShopperTrak predict a 3.3 percent gain this year from last. Foot traffic in stores, which was down last year, is expected to pick up 2.8 percent.

That's a brighter forecast than the 3 percent gain predicted for the last year's holiday shopping season, which was a mixed bag for retailers. Many scratched out sales gains of 3.4 percent year-over-year, but that was bolstered by deep discounts. By comparison, in 2010, retailers realized same-store sales gains of 4 percent.

"Consumers only have so many dollars they are going to spend at this point," said Megan Donadio, retail strategist at Kurt Salmon in New York. "By getting out there and letting people know about layaway plans, they [retailers] are making sure they are in the front of consumers' minds."

Plus, if consumers start spending earlier, they're more likely to spend more and buy more if they aren't rushed by a holiday deadline.

The big question, of course, is whether shoppers will cooperate.

Overall, retail sales this year have been bumpy. Consumer confidence has been low, and employment gains uneven. Robust back-to-school sales, however, gave many retailers a boost.

Working in retailers' favor is that they'll have more time this year to complete sales. This year, the calendar dictates that the holiday shopping season will last five weeks, instead of the typical four -- kicking off officially on Black Friday, the day after Thanksgiving.

That should give retailers an extra boost since shoppers aren't likely to get started until after the election, according to Chris Angell, ShopperTrak's director of global marketing.

Analysts also are betting on an uptick in online shopping this year, namely in electronics and appliances.