Analysis: U.S. retailers tread tight path in shortened holiday race

Mon Nov 11, 2013 5:14pm EST
 
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By Phil Wahba and Dhanya Skariachan

NEW YORK (Reuters) - U.S. retailers have little room for error in the fast-approaching and shortened holiday shopping season, a period that typically generates 30 percent of annual sales.

A late Thanksgiving - the unofficial kickoff for holiday sales - has lopped six days off the gift-buying season.

The battle for retail dollars is so fierce that even Uncle Sam will be delivering on Sundays in some locations this holiday season.

Amazon.com Inc (AMZN.O: Quote) announced on Monday that it would be the first retailer to partner with the U.S. Postal Service to offer Sunday delivery beginning November 17 in the New York and Los Angeles areas as it looks to give shoppers more shipping options. In 2014, Amazon plans to expand the service, that will continue past the holidays, to other locations including Dallas, Houston and Phoenix.

In other responses to the shortest holiday shopping season in a decade, retailers have tested their websites more, started sales a month early and hired extra trucks and planes to make last-minute deliveries if bad weather shuts down malls.

"You don't have much time to react if there's a snafu in your distribution system, if your website fails or if your rivals get very aggressive with discounting," said Michael Dart, a senior partner at consulting firm Kurt Salmon, where he leads the private equity practice.

The stakes are high as the holiday season accounts for about half the profits of many retailers.

Sales forecasts for this year's holiday retail season have been somewhat gloomy but they were issued before recent economic data showing stronger-than-expected growth in jobs and the broad economy.   Continued...

 
A woman carrying shopping bags enter a shopping store advertising sales in New York, December 24, 2012. REUTERS/Keith Bedford