Holiday Shopping Alert: The Sweetest Deals Are Yet to Come

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Attention holiday shoppers: Don't feel blue if you missed Black Friday or Cyber Monday. Retail analysts say the best is yet to come, with discounts growing deeper as the week before Christmas draws nearer.

"The promotions we saw on Black Friday serve as a baseline for what's to come," says Howard Davidowitz, chairman of retail consulting and investment banking firm Davidowitz & Associates. "The best deals are never this early. It always gets cheaper the closer to the holiday ... the last couple of days before Christmas are when you see the best deals."

"Shoppers may find discounts of 40% to 70% off on targeted items," says Kathy Grannis, a spokeswoman with the National Retail Federation. "Retailers are trying to make their final push and offer discounts on popular gift items."

Some retail analysts believe the discounts will be much broader and cover a wide array of items. They expect storewide sales to gain in frequency, along with such marketing strategies as buy-two-get-one-free.

What You Should Wait to Buy

Of course, retailers will be motivated to discount in some industry sectors more than others. You can expect better prices in the coming weeks on electronics, toys, clothing and accessories.

"The week before Christmas, the whole electronics department will be on sale with the most desirable items, which is something we didn't see on Black Friday," says Davidowitz. He added that the prices on flatscreen TVs have collapsed and that items from digital cameras to tablet computers will be thrown into the mix.

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Indeed, Consumer Reports gave Black Friday shoppers a word of caution that some of the prices on its recommended electronics models like cameras, laptops, and TVs would be at least 5% lower in the weeks after Black Friday.

A kissing cousin to the electronics industry is the toy industry. And toys are expected to take a hit on prices, given there is no blockbuster new product to carry the industry, Davidowitz says.

Meanwhile, the clothing and accessories industry is expected to grow only 5.5% to $65.7 billion in November-December sales compared with a year ago. Last year, the industry grew at a slightly strong clip of 5.8%, according to the International Council of Shopping Centers.

"Apparel is the No. 1 gift item," Davidowitz says. "But as it gets closer to Christmas, you'll see a massive sell-off in apparel, where discounts will be up to 70%. Apparel is perishable [due to its seasonality] and it's discretionary, which is difficult when consumer spending is weak."

Few 'Wow' Deals on Luxury Goods


Other areas to troll for deep discounts are sporting goods, books and hobby and music items. The ICSC forecasts November-December sales growth of 1% to $26.5 billion, far below the 5.6% growth of last year. Retailers in these sectors will be particularly keen to give shoppers incentives to spend.

But consumers may have to dig deep to find any "wow" deals on luxury items. Same-store sales at luxury chain stores in November-December are expected to be stronger than last year, according to ICSC. Luxury stores are expected to post a 7.5% increase over the same period last year. That is better than last year's 6.7% increase over the previous year.

"There is less discounting going on in luxury items," Davidowitz says. "But if the stock market collapses and everyone in the financial services industry doesn't get their bonuses, then all bets on luxury items are off."

Calendar Countdown

The caveat with ongoing markdowns is that consumers can't be sure whether the items they most desire will not just be cheaper, but actually in stock during the final days before Christmas.

"Retailers have been careful with their inventory, much more so than last year," Davidowitz says. "But if you talk to the salespeople and ask them if the item is well stocked, they're usually pretty honest and will let you know if you need to worry or not."

As consumers weigh the best time to go shopping, consider the ICSC's Top Holiday Sales Days. According to their list, the busiest remaining shopping days of 2011 will be:

Dec. 3, Saturday
Dec. 10, Saturday
Dec. 17, Super Saturday
Dec. 18, Sunday
Dec. 19, Monday
Dec. 22, Thursday
Dec. 23, Friday
Dec. 26, Monday

Dawn Kawamoto is a Motley Fool contributing writer. She is heavily invested in the spirit of Christmas.

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