Slashed Prices Signal Retailer Worries

Chains hoping deep discounts will move merchandise
By Mary Papenfuss,  Newser Staff
Posted Dec 23, 2011 2:11 AM CST
Slashed Prices Signal Retailer Worries
Pedestrians walk a shopping district as Express advertises a big sale in Philadelphia yesterday.   (AP Photo/Alex Brandon)

(Newser) – While store bargains may have shoppers saying "ho, ho, ho," they've got retailers thinking: "Oh-oh." Heavy discounts in the last days before Christmas are a signal companies are worried they'll be stuck with inventory that isn't moving off the shelves. Retailers had high hopes for the season, but sluggish sales are forcing them now to be “much more aggressive in terms of promotion," a retail consultant tells the New York Times. Toy prices are being slashed as much as 50% at Toys R Us and 70% at Amazon, and gifts have been discounted 50% at places like Restoration Hardware.

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Mall surveys show that at least a 40% discount is currently needed to drive traffic, according to an analyst. "Those that weren’t at that level weren’t getting their fair share,” he said. Strong Thanksgiving week sales seem to have satiated some shoppers' appetites. It took weeks for sales to start climbing again. Retailers have to unload as much inventory as they can now because its value plunges after the holidays. It's a good time to be a last-minute holiday shopper. “Literally everything is on sale, LOL," one procrastinator noted in a tweet spotted by the Times. "Knew my procrastination would come in handy some day.” (Read more holiday shopping stories.)

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