Holiday discounts are already hard to resist. The best bargains are yet to come

By Parija Kavilanz, CNN

Stores are drowning in a glut of merchandise this holiday season, keeping the discounts fast and furious in the runup to Christmas.

And the deals are only getting juicier.

So if you have the patience and the willpower to wait to grab a few bargains for yourself, you’ll be richly rewarded.

“The better deals are always in the last week before Christmas,” said Marshal Cohen, chief retail industry adviser for market research firm NPD. But for the very best deals, he advises to wait until “right after Christmas.”

The Saturday before Christmas — also known as Super Saturday — is typically the busiest shopping day of the November-December gift-buying period. With Christmas Day falling on a Sunday, and Christmas Eve falling on the preceding Saturday, Super Saturday this year is on Dec. 17th. More than 158 million consumers are estimated to shop that day, according to the National Retail Federation.

Shoppers have only completed half their gift purchasing so far, the NRF estimates. With eight days to go until Christmas Day, and drop-dead shipping deadlines approaching, people have a lot more buying to do.

Whether consumers will show up in force during the final push remains to be seen. The government reported Thursday that retail sales slowed in November, the start of the holiday shopping season.

“This year is very unique. Consumers are very cautious. They’re dealing with inflation and tighter budgets impacting their ability to spend,” said Adam Davis, managing director at Wells Fargo.

As consumers carefully plan their year-end discretionary spending, Davis said budgeting for travel and entertainment is also cutting into their budgets.

“All of these dynamics will benefit consumers because retailers are so overstocked,” he said. “There’s going to be a big push this weekend by retailers that have excess inventory to sell, and sell at any cost, because they want to start 2023 leaner and cleared out of the glut, especially if the economic headwinds get worse.”

It’s also costly for retailers to sit on an oversupply of merchandise for too long. Retailers who store merchandise in their own warehouse and distribution centers have a finite amount of space to work with, with some wiggle room to accommodate excess inventory. But costs add up if more space is needed for a protracted glut that they can’t quickly clear out.

Also, unsold products lose value over time. That’s especially true with fashion clothing as savvy shoppers won’t buy last year’s style if the trend has passed. Stores are then forced to heavily discount, which impacts profitability.

Well ahead of the final full weekend before Christmas, stores this year were already offering discounts of 50% to 60% off, and tacking on free shipping for online orders.

“I’ve studied the holiday season for 20 years and haven’t seen discounting so dramatic,” said Ross Steinman, professor of consumer behavior at Widener University in Chester, Pennsylvania.

“Retailers are very nervous,” he said. “The clock is ticking and they know they have to maximize every opportunity now to get consumers to make purchases.”

After Christmas deals

Some seasonal products will have blowout deals — think 80% to 90% off — right after Christmas.

You can expect to scoop up holiday perfume and cosmetics gift sets, toys, holiday decorations and decor, candles and artificial Christmas trees at pretty low clearance prices, said Davis. Heavy promotions should even extend to some electronics.

Walmart, Target, Gap, Macy’s and Kohl’s have struggled with an oversupply of clothing all year. This likely means prices for winter clothing such as coats, sweaters, boots, scarfs, and hats will be slashed deeper as chain stores look to transition in the New Year to fresh spring and summer merchandise.

“Retailers want to start selling for the next big holiday, which is Valentine’s Day,” said Davis. “In the typical retail cycle, stores set up for spring merchandise in February, so they need to quickly pivot away from holiday merchandise and winter apparel.”

But before you rush to bag New Year bargains, Davis offered this advice: “Check the return policy. We’ve seen retailers either truncate the window from 30 to 60 days to 15 days or designate as final sale.”

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