Well if Bob's store puts it's holiday crap out and people buy it, you can bet that next year his competitor will put theirs out a few days earlier than Bob. It kind of seems to go like that around here. It will stop when it comes out early enough that people just aren't buying it fast enough to make the shelf space profitable and then they will start to dial it back a bit I think.
It happens with all kind of stuff, like patio furniture, window air units, portable heaters. We get our stuff in at work earlier every year and it's sold out well before the season is over, but that's okay because we are getting the next season of shit in early to take it's place. It's getting where you can't buy the crap during the time you would use it but have to buy it before you really need it. For example when people wait until it gets really hot and come in trying to buy window air units, we are already almost sold out of them every time. Most patio furniture is sold out before the weather is really nice enough to regularly enjoy it. That sort of thing. Also with our online business, we don't have to stock it in store as long as it can just be ordered on line and sent to the customer.
Getting your seasonal stock out early, means you sell down early and lets you keep your seasonal rotation going, while using your online order fulfillment to to act as your warehouse so you don't have to carry as much stock that you could be stuck with at end of season. Big box stores are all working to have an end to end fulfillment system that keeps their in store stock at a minimum on anything that it makes sense to have that way (that is different for each type of business). This they couple with a just in time restocking program, where ideally they only keep a few days worth of sales per item on the shelves at any given time as new product is constantly coming in.
The online sales programs that big boxes are pushing are also turning their stores into more showroom space than retail space in some ways. We won't get as many of something in as we used to even though we can sell them, because we are expected to sell them online. Sometimes we only get displays of things. This works with the seasonal holiday merchandise as well. We'll carry a small selection of something like holiday inflatables, and include signage and displays showing off all the other ones you can order on line through us.
Honestly though, I don't see why people buy all that holiday decor crap.