Shoppers throng stores on the weekend before Christmas

Taking advantage of deep discounts and extended hours, shoppers crowded stores over the last weekend before Christmas to try to grab bargains on festive gifts. But despite the spending surge, the increase in shopping revenues may not be enough to offset a mediocre peak shopping season for retailers.

Mall operators said they got a boost from the weekend spending spree, but they were still counting on Christmas Eve and post-Christmas business to meet holiday sales goals for the year.

Besides, the cheer is not evenly spread. Last weekend's shoppers snapped up flat-screen TVs, Wii game consoles and software, and other gadgets, which helped stores like Best Buy, but the apparel business remained subdued. All in all, say analysts, the pre-Christmas business is below expectations despite the weekend sales surge.

Not surprisingly, merchants that have struggled through a sluggish December after a strong start to the season, are counting even more on the final days before Christmas to make their holiday goals. The three days before Christmas bring in as much as 15 per cent of holiday sales, so there's a lot of business left to do.

Apart from offering whopping discounts, stores are staying open late. Macy's is keeping several of its stores in the New York metropolitan area open till 6 pm on Christmas Eve. About 1,000 Kmarts will be open for 64 hours straight, from 6 am on Saturday to 10 pm on Christmas Eve, for the first time since 2002.

With retailers routinely discounting items deeper as Christmas - which falls on a Tuesday this year - nears, shoppers have waited even longer this season to finish their holiday shopping. A slowing economy, higher gas prices and a housing slump have made some shoppers hold off until the final days before the holiday..

With fuel prices and car insurance up. People are spending less and worrying more about it. Said a suburban housewife: "I used to just take the children's Santa list and get the top ones on it. Now I have to think about what can I get at the best deal."

Nevertheless, some analysts are sticking with a forecast of a 1.5 per cent gain in same-store sales or for sales at stores open for at least a year. This would mean same-stores sales for the November-December period would be up 2.5 per cent from a year ago, something that shoppers will have to turn out in strength on Monday, to turn into reality.

ShopperTrak, which tracks total sales at more than 50,000 retail outlets, is still sticking with its 3.6 per cent forecast for the November-December period, though a representative nuanced the forecast by saying: "Some retailers will do OK, and others won't." The agency is expected to release total sales for the week ended Saturday, late on Monday.

Even if that target is achieved, overall holiday sales gains could come at a cost for retailers. Stores have discounted heavily, at the expense of margins. Apparel merchants, especially, are likely to report falling fourth-quarter profits.