Holiday buying is losing power

Physical stores see drop in sales at Christmas season.

NEW YORK — The holiday shopping season is losing some of its power in the year’s sales.

November and December now account for less than 21 percent of annual retail sales at physical stores, down from a peak of over 25 percent, and experts believe it will keep dropping. Those extra percentage points would have translated into an extra $70 billion more in buying for last year, says Michael Niemira, principal at The Retail Economist.

The season had steadily gained in importance and peaked in the early ’80s, before the dominance of big discounters like Wal-Mart stalled its growth as shoppers began moving away from department stores. Still, the two-month period held its own through the mid’90s, when online sh opping for deals took hold.

“There was a mindset even before online shopping,” said Niemira, whose data goes back to 1967. “But this just accelerated it.”

In general, many people are shopping for the holidays all year long now, mirroring the trend for backto-school items. Heavy discounting has diluted sales, and with big promotions throughout the year, shoppers no longer hold off making their biggest purchases until the holidays.

This year, the contentious presidential election delayed some shoppers, and with Christmas falling on a Sunday, stores are expecting a bigger number of last-minute buyers. At a busy Target store in Brick, N.J., on Saturday morning, many shoppers seemed to be picking up small items to use as stocking stuffers. Others were hoping to find a last-minute deal.

“I’m pretty much set for Christmas, so I thought I would come down and see what I could find on sale, like maybe a TV,” Terry Kreft, 38, said as she strolled through the store. She has spent about $600 on gifts this year, taking advantage of discounts during the traditional holiday-season shopping days right after Thanksgiving, called “Black Friday” and “Cyber Monday.”

“I was pretty much done with my shopping before December got rolling,” Kreft said.

But a late rush isn’t expected to make up the difference.

“It’s no longer a seasonal business,” said Marshal Cohen, chief industry analyst at consumer research firm NPD Group Inc. “It’s a yearlong investment for the consumer. And retailers need to change. They have to excite shoppers early in the season and later in the season - and all year long.”

Here’s what’s behind the shift:

Shoppers don’t wait to buy big-ticket items. Stores now offer good deals throughout the year on products like TVs and appliances, making waiting until the end of the year less appealing. Deloitte LLP found 30 percent of shoppers planned to wait for holiday sales to buy large gifts, down from 35 percent a year ago.

“People are not holding back and waiting because they find a good price for all the things they are looking for,” said Rod Sides, vice chairman of Deloitte.

Christopher Rogers, a research analyst at Panjiva, which looks at imports, says he has seen a smoothing out of imports during the pre-holiday shopping season from July to November on key items like apparel, toys and furniture.