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.

"I just question whether the retailers will give enough discounts to get shoppers into the stores," he said.

Although Black Friday, or the day after Thanksgiving, generated a 4.8% increase in traffic, industry watchers say things have tapered off considerably since. The first two weeks of December saw a lull, and only now are the crowds starting to come back.

In San Francisco's Union Square shopping district over the weekend, customers carried armloads of red shopping bags from Macy's. Crosswalks were jammed with slow-moving clusters of people trying to make it to the other side before the light turned red.

In other parts of the country, however, wintry weather kept some shoppers away. Ellen Davis, a spokeswoman for the National Retail Federation, which predicts holiday sales will be up a slower-than-average 4%, says heavy snowfalls made it tough on retailers.

But it's hard to gauge how much of an impact the weather ultimately has on consumers. For instance, last year during the holidays, retailers said warm temperatures discouraged shoppers from purchasing thick sweaters and coats. This year, cold temperatures could make people want to huddle in their homes.

Christine Chen, an analyst from Needham & Co., says cold weather is only a problem if it keeps shoppers away for prolonged periods of time. One day of heavy snow is not enough to ruin holiday sales for a retailer, although it certainly hurts if it happens during the peak of the season.

And the peak of the season is still to come. This Saturday is expected to be the busiest shopping day of the year for retailers, eclipsing Black Friday.

Chen expects those retailers who have been promoting all along will continue promoting, including in the women's apparel sector, which saw soft sales even before the holiday season began.

According to a holiday report released by MasterCard, sales for women's apparel was down 5.7% in the first 20 days after Black Friday. But there was a 4.5% increase in men's apparel.

Chen says she expects teen retailers like Aeropostale ( ARO) and Abercrombie & Fitch ( ANF) to hold their own. But she acknowledges that expectations are low for everyone.

Even online sales seem to be losing some traction. According to research firm, comScore, online retail spending has grown more than $22 billion between Nov. 1 and Dec. 14, which marks an 18% climb. While that still represents a record level, it is less than the 26% increase during the same period last year.

Part of that can be attributed to a decline in spending by lower-income households. For instance, households earning at least $100,000 increased their online spending by 28% compared with a year ago, according to comScore. But households earning less than $50,000 increased their spending only 10%.

"The current economic realities appear to be having a negative impact on the growth in consumer spending," said comScore Chairman Gian Fulgoni in a statement. "From the subprime housing meltdown to a decline in home values to higher gas prices and an uncertain stock market, many consumers across all income segments are either feeling the pinch this holiday season or are lacking the confidence to spend at the rate they had in the past."

Online sales have likely already seen their peak this holiday season. Davis points out that most offers for ground shipping delivery by Christmas will end today.

That leaves brick-and-mortar stores with all the remaining heavy lifting. Beemer doubts that shoppers will dole out their dollars for anything less than 60% off at this point.

"They have certainly not been impressed with the prices they've seen," he says.

Chen believes shoppers are simply procrastinating with their shopping, regardless of the promotions.

"In this environment, everybody's a little bit nervous, but I do expect a big rush in the end," she says.