Retail Throws a Hail Mary

SAN FRANCISCO -- Retailers have one last week to coax shoppers into stores before all bets are off.

Right now, they are doing whatever it takes.

This past weekend brought a big surge of traffic, but not enough to make up for the lack of sales throughout the holiday season, industry observers say. As a result, retailers will have to cut their prices deeper -- driving down profit margins -- and keep their doors open longer to gain some ground in the home stretch.

J.C. Penney(JCP), for instance, is offering 30% to 60% off its toys, while Kohl's(KSS) is offering 60% off its jewelry and 30% to 65% off its outerwear.

Macy's(M) says seven of its stores in the New York metropolitan area will stay open 24 hours from Dec. 21 until Christmas Eve.

All these efforts come in hopes that customers will come out in droves at the last minute to snatch up deals. According to a survey by America's Research Group, which conducted 800 interviews over the weekend, 74% of respondents said they had completed most, but not all, of their holiday shopping, and 53.4% said they planned to hold out for bigger bargains.

Britt Beemer, chairman of America's Research Group, expects holiday sales to increase only 1.8% this year, his lowest forecast in over 10 years.

Even with deeper discounts this week, Beemer is skeptical that retailers can make up for the traffic they lost all season.