The holiday shopping home stretch run starts this weekend, and U.S. retailers hope that dilly-dallying shoppers are ready to open up their wallets and get serious about spending.
The 10 days before Christmas are the busiest of the season, with as much as 40 percent of total holiday sales coming then, according to analysts from the Telsey Advisory Group.
The strength of this holiday season has been difficult to measure, as shoppers remain stuck in a post-Thanksgiving lull and retailers have held off on dramatically slashing prices, betting shoppers will come to stores closer to Christmas.
But with the final shopping days of the season approaching, retailers must now try to dazzle shoppers with discounts without undermining profits. There is also a major winter storm headed for the Northeast that could crimp sales during one of the season's most important shopping weekends.
People will still go the mall, they will still buy their Wiis and other hot toys, said Scott Bernhardt, chief operating officer for weather tracking firm Planalytics. But they're going to be all business.
That means consumers will go to stores only in search of the items they need and head home as quickly as possible, leaving those potential impulse purchases on store shelves.
Holiday sales were expected to rise at their slowest pace in five years as shoppers contend with rising energy costs, increasing food prices, a deteriorating housing market and a credit market crunch.
But holiday sales and the state of the consumer has been difficult to gauge.
In a positive sign, shoppers came out in droves for the Thanksgiving weekend, drawn by steep discounts like 50 percent off Star Wars Transformers at Toys R Us, Sony laptops for $399 at Best Buy, and a Martha Stewart Christmas tree on sale for $99.99 at Macy's.
More than 147 million shoppers hit U.S. stores Thanksgiving weekend, but, in a worrisome sign, average spending per consumer fell, according to the National Retail Federation.
Once the deep discounts disappeared after Thanksgiving, so did shoppers, data from ShopperTrak RCT showed.
Traffic to U.S. stores has fallen in the past two weeks compared with a year ago, the firm said, as penny-conscious consumers hold out for deeper discounts closer to Christmas.
That falling traffic hurt November sales at many U.S. retail chains, with Target Corp warning last week that sales would need to meaningfully improve in December for its fourth-quarter earnings per share to grow.
While Target warned, other chains said November sales beat expectations and many department stores posted double-digit sales gains. But those retailers were helped by a shift in the calendar that pulled some holiday shopping days into November -- and will take them away from December.
In another mixed sign, government data this week showed retail sales rose 1.2 percent in November compared with October. It was twice the increase Wall Street economists expected but some of the gains were due to rising gas prices.
Given the various distortions to these numbers, including a stiff upward spike in gasoline prices, and an unusually high number of calendar business days in November, it is hard to get a read on true underlying retail sales momentum, Global Insight U.S. economist Brian Bethune wrote in a note.
Shoppers have indicated they want to see steep discounts before they return to stores, and retailers are now getting ready to roll out their final holiday sales push.
This weekend and the following weekend are absolutely crucial, said Scott Krugman, a spokesman for the National Retail Federation. It's crunch time.
Many analysts said holiday sales thus far have been mediocre or modest or ho-hum and no matter what stores do in the next 10 days, it will still be a ho-hum holiday.
Brian Girouard, global leader of the consumer products and retail practice for Capgemini, said some retailers may have protected themselves from having to slash prices in the next 10 days because they reduced inventory heading into the final months of the year.
But other retailers, desperate to win business, may turn to profit-crunching sales, he said.
There's probably a lot of retailers that are saying 'Listen, I've got to show growth in my stores and I'm willing to do that by just getting people in, discounting the heck out of things and we'll pay for it in our profit', he said.