Retailers Need a Last-Minute Holiday Gift From Shoppers

The stakes are high for retailers, which are contending with slowing consumer spending, a powerful winter storm that could dampen traffic in the coming days, a glut of merchandise and cost-conscious customers willing to wait until the final hours for the best deals. Higher discounts will come at the expense of profits, but chains don’t want to risk being stuck with excess holiday goods in the New Year.

“This will be one of those years where we’re watching sales closely up until the last minute of Christmas Eve,” Walmart Inc. Chief Executive

Doug McMillon

told analysts in November.

This holiday season nail-biter is a reversal from the past two years, when supply-chain backlogs and shipping delays created an urgency among consumers to shop earlier. In some cases, retailers didn’t have enough products to sell, which allowed them to charge closer to full price for everything from winter coats to cashmere sweaters.

This year, the easing of production and shipping delays coincided with a pullback in consumer spending, leaving chains from

Target Corp.

to

Gap Inc.

with too much stuff. As people return to stores and buy less online, the capacity pressures at carriers such as

FedEx Corp.

and

United Parcel Service Inc.

are easing, lessening the risk that gifts will arrive after the holiday. There is also one extra Saturday this year between Thanksgiving and Christmas, giving people more time to check items off their lists.

Shoppers slowed their spending in November and early December, according to government data and research firms, raising the urgency of these final days. As of last weekend, 12% of people hadn’t started their holiday shopping, up from 9% at the same time last year, according to research firm Morning Consult, which surveyed 2,200 U.S. adults.

The primary reason for the delay are concerns about the economy and inflation, which remains near a four-decade-high, although it eased somewhat in November. “The folks who are waiting to shop say they are worried about being able to afford the holidays,” said Claire Tassin, Morning Consult’s retail and e-commerce analyst.

A storefront, left, advertises a 40% off sale on Fifth Avenue in Manhattan. At right, a woman carries a dog on Fifth Avenue.

Irina Bromberg of Miami is looking for an iPad for her daughter, but will only buy one if it is on sale. “Finding last-minute deals is even more important when I’m already paying considerably more for everything this year,” said the 41-year-old digital-content creator.

Black Friday, the day after Thanksgiving, is typically the busiest shopping day of the season, according to store foot traffic tracker Sensormatic Solutions, and is expected to rank No. 1 again this year.

The Saturday before Christmas, known as Super Saturday, is typically a close second, but this year the Super Saturday of Dec. 17 likely fell to fourth place because it was too far away from the holiday, according to Sensormatic. That calendar shift made the season even more back-end loaded than usual.

Change from year ago in U.S. discretionary general merchandise sales

Dec. 23 is expected to be the second-busiest day, followed by the day after Christmas. Christmas Eve typically doesn’t make it into the top 10 because stores close early, according to

Brian Field,

Sensormatic’s global leader of retail consulting and analytics.

Retailers began offering holiday deals in October, hoping the early promotions would attract more traffic. But the season got off to a slow start by some measures.

General merchandise sales for the week of Black Friday fell 5% compared with the same week in 2021, according to market research firm NPD Group, which tracks point-of-sale receipts. Sales were also less than the same week in 2019, the first time this year that general merchandise sales for one week fell below prepandemic levels, NPD said.

The declines deepened as December progressed with sales falling 2%, 5% and 7% in the weeks that ended Dec. 3, 10 and 17, according to NPD.

“Last year, people started shopping in October because they were afraid we’d run out of toys,” said

Isaac Larian,

the chief executive of MGA Entertainment Inc., which makes Bratz and L.O.L. Surprise! dolls as well as other toys. “This year is the opposite. Consumers know there is a glut of inventory and they are waiting until the last minute.”

Forrest McCall, 28, of Louisville, Ky., passed on Black Friday deals for an

iRobot

vacuum and a 55-inch TV in the hopes of finding better prices closer to Christmas. “Just because the deals are offered earlier, it doesn’t make me feel like I need to shop earlier,” said Mr. McCall, who runs a personal finance website. “I didn’t feel like pulling the trigger yet.”

Most discounts on Black Friday are typically planned, meaning retailers bake the deals into prices from the outset. But if sales fall short of expectations, retailers start slashing prices below planned levels, industry executives said.

That appears to have happened this year. Discounts peaked over the Black Friday weekend, fell in early December and began rising higher as the month drew to a close, according to DataWeave Inc., an analytics company that tracked prices across five categories, including apparel, shoes, electronics and furniture, on the websites of 35 U.S. retailers. Last year, discounts declined through early January after peaking during the Thanksgiving weekend.

By mid-December, Walmart cut prices on holiday décor and artificial Christmas trees by 25% instead of waiting until after the holiday, as it normally does. It also deepened the discounts in recent days on certain toys such as

Microsoft Corp.’s

Xbox game console. A Walmart spokeswoman declined to comment on the pre-Christmas sale of holiday décor, but said the toy discounts are part of its regular holiday promotions.

Handbag maker MCM is offering 60% off select fall and winter styles, deeper than its Black Friday sale of 25% off certain full-priced products. Apparel brand Tommy Hilfiger is offering 50% off everything on its website in a deal running through the Tuesday after Christmas. On Black Friday, shoppers had to spend at least $150 to get that discount, but Tommy Hilfiger dropped that requirement.

Macy’s Inc.,

the big department-store chain, also stepped up discounts of some Ralph Lauren and Coach items in recent weeks and athleisure maker Athleta had more items on sale, according to Simeon Siegel, a senior analyst at BMO Capital Markets.

A spokesman for Gap Inc., which owns Athleta, declined to comment.

Nata Dvir,

Macy’s chief merchandising officer, said the company uses artificial intelligence to help set prices based on demand and provide customers with the best value.

“The shopping season seems to be coming in on the back-end and is very different from the past two years,” said Sarah Rasmusen, chief customer officer at

Lands’ End Inc.,

which is running its Black Friday discounts of up to 70% off winter coats, fleece, sweaters and other items straight through Christmas Eve. “To get the front half of December going, it had to be juiced with promotions.”

Ms. Rasmusen said that this year more customers—including herself—are paying for expedited shipping, after missing the Dec. 15 cutoff for standard shipping with guaranteed Christmas delivery.

Average discounts in select retail sectors in Nov. and Dec. compared with same week a year ago

It isn’t just the hunt for better deals that cause shoppers to procrastinate. Researchers say anxiety is a major factor. This year, the normal stress of trying to find the right gift is compounded by financial concerns.

“Some people are feeling anxious about spending money because of inflation,” said Jeffrey Galak, a marketing professor who studies consumer behavior at Carnegie Mellon University. “If something makes you anxious, people will put it off.”

Shoppers may also be finding less novelty to excite them this year. New items accounted for 1.4% of general merchandise products in November 2022, down from 3.3% in November 2019, according to NPD.

“The absence of newness has created a laissez faire consumer,” said Marshal Cohen, NPD’s chief industry advisor. He said there are fewer hot toys or must-have electronic gadgets this year, creating a lack of urgency to snap them up before they sell out.

That could be the result of what transpired during the Covid-19 pandemic, when it was more difficult to develop new products while people worked from home, Mr. Cohen said. He added that excess inventory and an uncertain economy give companies less incentive to invest in newness.

One holiday consumer who will be waiting until the final hours is Jorge Valldejuli, a 40-year-old digital consultant in Orlando, Fla. He said he plans to wait until Christmas Day to buy gift cards at convenience stores and gas stations.

“I don’t like preplanning, because everything changes so fast,” he said. “If I wait, I can change my mind at the last minute.”

Write to Suzanne Kapner at Suzanne.Kapner@wsj.com