Transcripts

Procrastination Pays Off For Shoppers

JEFF YASTINE: Shoppers packed stores across the country today as many of the nation's retailers extended their hours to pick up every last dollar of holiday spending. On this Christmas Eve, huge markdowns enticed consumers into malls. But those deep discounts are costing retailers' bottom lines. And despite the flurry of activity today and over the past weekend, experts say the 2007 holiday selling season is still expected to be sluggish. Suzanne Pratt reports.

SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: Last-minute holiday shopping in New York today was a procrastinator's dream. The weather was clear, the street traffic was light and the discounts were abundant. Recent surveys show consumers are completing their gift buying later this year than in the past. Retail expert Dana Telsey says tardy gift buyers benefited from last-minute deals.

DANA TELSEY, CEO, TELSEY ADVISORY GROUP: We believe the level of promotions for the holiday season this year is greater than it was last year. The key is going to be what level of markdowns and were people able to sell it at decent rates.

PRATT: Nevertheless, experts say it would take a lot of Christmas Eve spending to prop up this holiday season for the nation's stores. Shoppers across the country have been grappling with bad winter weather, higher gasoline and food prices, as well as concerns about declining home values and a potential recession. While JPMorgan Chase analyst Brian Tunick gives the 2007 holiday season a "B" for retailers, he's most worried about the future.

BRIAN TUNICK, RETAIL ANALYST, JP MORGAN: If this is the foreshadowing of what's to come in 2008, I mean, that's going to be ugly. I mean this will be the first time in three or four years that the consumer may have already spent sort of their refinancing from the past couple of years.

PRATT: In the retail universe, experts say electronics are the clear winner this year, while department stores and most specialty apparel shops are having a bad season. And it looks like Internet sales rose at the slowest pace ever, despite deep discounts and a plethora of free shipping deals. According to Comscore which measures online shopping, holiday e-commerce spending was up 19 percent through Friday, compared to a 26 percent gain last year. Gift cards could still help save the season, as those sales are not recorded until the cards are redeemed, usually in January.

TUNICK: These gift cards are really reshaping the holiday shopping period, so that's going to be another thing. People are going to be encouraged to look at the December and January sales results combined I think for a better view.

PRATT: Most retailers will report those December sales results on January 10, so it will be a few more weeks before investors know exactly how blue this Christmas was for the nation's stores. Suzanne Pratt, NIGHTLY BUSINESS REPORT, New York.