Stores pull out the stops in final sales stretch

Gadget gift ideas

More Videos

Quick Vote

How much of your holiday shopping are you putting on a credit card?

• None of it
• Less than $100
• $101 to $500
• More than $500

or View results

NEW YORK (CNNMoney.com) -- The Saturday before Christmas is typically the busiest shopping day of the year for retailers.

This year, merchants are especially desperate to squeeze out the last-minute sales. Most big chains are offering discounts as deep as 60% to 80% in the final make-or-break weekend of the 2008 holiday shopping season.

The good news for sellers is that there are still plenty of last-minute procrastinators. The National Retail Federation said earlier this week that 41 million Americans haven't yet started their gift purchases.

"With so much shopping left to do, the weekend before Christmas will be one of the most important periods of the year for retailers," NRF Chief Executive Tracy Mullin said in a statement.

If this holds true, stores should see a much-needed pickup in traffic, which so far has been exceptionally weak in November and through most of December.

Those two months also account for as much as 50% of stores' annual profits and sales. Research firm ShopperTrak estimates that shopper traffic plunged 16.7% last month and as much as 18% just last week over the same periods a year earlier.

At least one analyst anticipates a surge in retail traffic over the weekend.

"This Saturday will be a very big day, one of the biggest we've seen," said Marshal Cohen, chief retail analyst with the NPD Group. "It will be super for sure."

He added that consumers who have held out to bag the best deals of the season won't be disappointed with the prices, although the selection of merchandise this close to Christmas probably won't be that great.

Here's a sampling of what shoppers can expect. J.C. Penney's (JCP, Fortune 500) "Christmas Countdown" sale features 30% to 60% off on clothes, home products, housewares and jewelry.

Sears (SHLD, Fortune 500) has slashed prices by as much as 70% on jewelry, 50% to 60% on winter clothing and by 50% on some of its Craftsman-branded tools.

Elsewhere, Gap Inc. (GPS, Fortune 500) has a 40% off sale on clothing and accessories, American Eagle Outfitters is offering its shoppers a "buy 1 get 50% off on second item" on everything in its store and Kohl's is cutting prices by as much as 60% on clothing.

Discounter Wal-Mart (WMT, Fortune 500), which has already been very aggressive with holiday pricing, said this week that it will match any local competitor's advertised price on the exact same item. The retailer also extended its standard shipping rate of 97 cents for delivery of online orders in time for Christmas until Sunday.

While there will be bargains, Cohen warned that most shoppers will be very disappointed with the "leftover" products in stores.

"There are not a lot of desirable products sitting on store shelves right now," he said. Cohen said most merchants, fearing weak holiday spending, canceled their reorders for the season.

"So they never got the second and third wave of goods that they typically get in December to keep the stores looking fresh," he said. "Good luck finding something that you didn't already see in October."

With that in mind, Cohen and other industry watchers are fairly certain that even if retailers see robust weekend sales, it's too little too late to save what could be the weakest holiday sales gain in six years.

"The stores will look busy but retailers won't get much volume in sales," Cohen said.

Frank Badillo, economist with Retail Forward, agreed with Cohen. "There's a real risk that because of lean inventories, many shoppers could walk away from stores simply because there was nothing of interest there for them."

Independent retail consultant George Whalin said he's already revised down his holiday sales forecast four times. "It's just too late to save the season," he said. He initially expected that holiday sales could be flat to marginally higher over last year.

"No one thinks that anymore. I will be thrilled if they decline 5% and not more," he said.

Besides product shortages, winter storms in parts of the country and a some big movie releases heading into the weekend could also keep shoppers out of stores.

"Obviously bad weather is a problem [for retailers]," said Cohen. "Last year we also didn't have lots of blockbusters before Christmas. It's bad news if people spend their downtime at the theater instead of in stores this weekend.'