Economy

On your marks...start shopping for the holidays!

Nov. 1, 2013 at 10:03 AM ET

A woman with a full shopping cart heads to the checkout at a Wal-Mart Store in Chicago in this file photo taken November 23, 2012.  Wal-Mart Stores In...
JOHN GRESS / Reuters
A woman with a full shopping cart heads to the checkout at a Wal-Mart store in Chicago on Nov. 23, 2012. Wal-Mart and other retailers are starting their holiday shopping promotions earlier this year as the season is shorter than usual.

Retailers facing the shortest holiday season in years are preparing to assail customers with deals and promotions this week, before they have even digested their Halloween candy.

Wal-Mart Stores Inc was kicking off its online deals on Friday, a month earlier than usual - underscoring worries that intense discounting aimed at luring budget-conscious shoppers could result in the most tepid holiday spending rise in four years.

U.S. retailers have traditionally kicked off the all-important holiday shopping season on or the day after Thanksgiving and saved some of their best online deals for "Cyber Monday," the Monday after Thanksgiving when workers return to offices and use computers to make holiday purchases.

This year, the holiday falls on Nov. 28 and a result there are six fewer shopping days between Thanksgiving and Christmas, prompting many retailers to jump the gun on incentives.

Some analysts say the holiday season, which typically accounts for the lions' share of most retailers' annual revenue, will be the most heavily discounted in years as competition for shrinking budgets ramps up.

Wal-Mart was holding an online sales event on Friday featuring items from JVC 42-inch LED televisions for $299 to Xelio 10.1-inch tablets for $49. Those are Walmart.com's lowest prices in those categories.

The world's largest retailer is also offering free shipping on about 99 percent of its online items this year for orders over $50. Last year, only 15 percent of its assortment qualified for free shipping.

The earlier deals and bigger incentives come after data firm ShopperTrak forecast the slowest holiday sales growth since 2009, and other data showed consumer confidence tumbled in October as a partial government shutdown rattled households.

"We have had the debt-ceiling crisis and payroll tax increases. There has just been a lot of pressure on the customer all year along," Joel Anderson, president and chief executive of Walmart.com U.S. told Reuters earlier this week.

Morgan Stanley analyst Kimberly Greenberger expects this holiday season to be the most promotional one since 2008. She sees e-commerce accounting for about 12 to 13 percent of overall holiday retail sales versus last year's 11 percent.

Wal-Mart is on track to hit $10 billion in global e-commerce sales this fiscal year and expects to make more than $13 billion in such sales next year.

But Wal-Mart is not the only one to court holiday shoppers early.

Toys R Us, which started airing holiday ads earlier than last year and began a cash-back offer of up to $100 for loyalty-program members who bought certain toys by Oct. 31, is now promising them special access to Black Friday deals before anyone else.

Amazon.com showed it was gaining market share at a rapid pace, last week when it released earnings. It also showed that it was still investing in technology, content, supply-chain management and international markets.

Target says it, too, is spending more on holiday advertising, extending its price-match policy and expanding its "buy online, pick up in store" service to all U.S. stores by Nov. 1.

"It has been a difficult, choppy year from an economic standpoint," said Kathryn Tesija, Target's executive vice president of merchandising and supply chain. She expects holiday shoppers to be very budget-conscious.

Wal-Mart and Target, both of which have struggled to keep up with online demand, said their websites are now better equipped to handle any potential spike in traffic.

"We have really stress-tested in every form, function and fashion," Anderson said, adding that Wal-Mart's website will be able to make more personalized offers to online shoppers and produce more relevant results when they search for an item.



Copyright 2014 Thomson Reuters.

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