Retailers' big fear: 35M procrastinators

NEW YORK (CNNMoney.com) -- Some 35 million Americans have yet to start shopping for holiday gifts - meaning that the next seven days could make or break many retailers' Christmas season.

The National Retail Federation (NRF) said Tuesday that 25 million consumers, or 11.7 percent of shoppers, have completely finished their holiday shopping.

That leaves 35 million consumers, or 16.5 percent of shoppers, who said they haven't even started yet. That number is up from 33 million procrastinators at the same point last year.

Although the penchant to delay holiday shopping isn't new, it has more bearing this year amid concerns that consumers have reined in holiday spending amid the housing downturn, tighter credit conditions and sky-high gas prices.

November and December are critical for retailers - and the U.S. economy - because the period can fuel as much as 50 percent of sales and profits at many chains.

After an initial sales rush at the start of the season on Black Friday, the buying momentum slowed considerably in early December.

Some retail analysts' blamed this month's slowdown partly on shopping fatigue after anxious retailers like Wal-Mart (WMT, Fortune 500), kicked off their holiday promotions as early as Octobers.

The NRF estimates that overall holiday sales will increase 4 percent to $474.5 billion, its slowest rate of growth since 2002 when sales rose 1.3 percent.

One industry expert, Britt Beemer with America's Research Group, said that the 4 percent target could be well out of reach.

Beemer lowered his original holiday sales forecast to 1.8 percent increase from his earlier 2 percent growth prediction.

In a survey of 800 shoppers he conducted on Dec. 15-16, 51 percent of respondents said they had not finished their shopping and were waiting to take advantage of deeper price cuts.

For its part, the NRF is betting on a final push to buoy sales.

"The last-minute rush will be busier than ever this year, and retailers are preparing by expanding employee schedules, keeping shelves stocked, and extending store hours," said Tracy Mullin, chief executive of NRF.

Macy's (M, Fortune 500) announced that some of its New York area stores will open for 24 hours this week until Christmas Eve.

"Though the holiday season will be a challenge for retailers, and shoppers are paying attention to prices, people are still buying Christmas presents," she said.

Meanwhile, online holiday shopping is booming. During the first 44 days of the season, total online retail spending, excluding travel-related purchases, reached $22 billion, up 18 percent from a year earlier, according to ComScore Networks.

On Monday, Dec. 10, consumers set a single-day record for online spending - totaling $881 million or 33 percent more than the same Monday a year ago, the firm said.

However, the 18 percent increase still trails last year's 26 percent growth over the same period in 2005. The firm said slower growth among lower-income households was weighing down overall growth.

"The current economic realities appear to be having a negative impact on growth in consumer spending," said Gian Fulgoni, chairman of comScore Networks.

"Many consumers across all income segments are either feeling the pinch this holiday season or are lacking the confidence to spend at they rate they had in the past," he said.