The numbers are sobering for retailers, which depend on making up to 40 percent of their revenue in the last two months of the year. They suggest shifts in the attitudes of U.S. shoppers that could force stores to reshape their strategies:
Stores slashed prices during the recession to get financially-strapped shoppers in stores and to better compete with the cheaper prices of online retailers like Amazon. But shoppers got used to those deals and now won’t buy without them. The constant discounting has blunted the “wow” factor of sales during the holidays.
Overall, the retail federation expects spending in November and December to rise 3.9 percent to $602.1 billion. But to get that growth, analysts say retailers will need to discount heavily, which eats away profits.