Last-minute bargain hunters can’t assuage retailers’ fears

Shoppers are excited by last-minute deals.

NEW YORK (AP) — Last-minute shoppers headed to the nation’s stores and malls on the day before Christmas, looking for the final items they needed and searching for good deals — but for retailers, the season was essentially over long ago.

Many merchants are already tallying up just how dismal their sales were in a season expected to be the worst in decades.

“It’s beyond the worst fears of retailers,” said C. Britt Beemer, chairman of America’s Research Group.

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.

Retailers’ woes were good news for the dwindling numbers of shoppers who could afford to load up on deals. With mounds of inventory still left to sell, merchants are expected to deepen the discounts even more the day after Christmas.

But if 75 percent off before Dec. 25 didn’t make shoppers splurge, will even bigger deals do the trick amid mounting worries about layoffs and shrinking retirement funds?

Crowds were light early Wednesday at the Square One Mall in Saugus, Mass., a suburb north of Boston. Wander Caldas, a 50-year-old truck driver from Everett, Mass., said his wife had lost her job and wasn’t working this year, so the family — including his 12-year-old son — had cut their Christmas spending.

“We cut it like in half,” Caldas said. “That’s why I have to slow down.”

Caldas said his son wanted an iPhone and Sony PlayStation 3, but “it’s not a good time. He’ll have to wait.”

Barbara Rice came to Mondawmin Mall in Baltimore for some last-minute gifts and knew she’d find deals, saying she regularly saw “half off, 75 percent off.”

“I’m almost done,” she said. “It’s just the little leftover stuff I have to do today.”

Her daughter, Donyai Rice, wasn’t planning on shopping when she got to the mall. However, she found a $60 Sony PlayStation2 video game system, a Nintendo Game Boy, a cell phone and shoes all on sale.

In Christmases past, the retail industry had relied on a surge before and after Christmas to help save the season. But the holiday period was virtually over before the Thanksgiving weekend ended as stores grapple with the most severe retrenchment in consumer spending in decades.

Facing pressure from vendors and consumers who aren’t spending, Circuit City Stores Inc. filed for bankruptcy protection last month. It plans to keep operating, but toy retailer KB Toys, which filed for bankruptcy protection earlier this month, has already begun to liquidate all of its stores and will shutter operations completely.

Merchants desperate to pull in shoppers started deeply discounting holiday goods as soon as they hit stores starting in November. But except for a shopping binge on the day after Thanksgiving, Americans have remained tight-fisted. When they do buy, they are looking for small-ticket, more practical gifts.

Another worrisome sign is that people are taking advantage of deep discounts by buying items they will need in the future. Paige Wallington of Raleigh, N.C., who came out just before 8 a.m., said she needed to get items for family members before heading off to work.

But she also found herself in the ornament section, where prices were up to 60 percent off.

“Some for this Christmas, some for next,” the 46-year-old collections officer said while eyeing a snow globe and carrying a few bags of clothing. “I’m shopping while I still have a job.”