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

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Shops are drowning in a glut of merchandise this holiday season, keeping the pre-holiday discounts fast and furious.

And the deals keep getting juicier.

So if you have the patience and the will to snag a few bargains, you will be richly rewarded.

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

The Saturday before Christmas – also known as Super Saturday – is usually the busiest shopping day of the November to December gift buying season. Because Christmas Day falls on a Sunday and Christmas Eve falls on the preceding Saturday, Super Saturday falls on December 17 this year. More than 158 million consumers are estimated to shop that day, according to the National Retail Federation.

Shoppers have only bought half of their gifts so far, the NRF estimates. With just eight days until Christmas Day and delivery dates fast approaching, people have a lot more shopping to do.

Whether consumers will kick in at the final sprint remains to be seen. The government reported on Thursday that retail sales slowed in November, the start of the holiday shopping season.

“This year is very unique. Consumers are very cautious. They are dealing with inflation and tighter budgets that are affecting 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 constraining their budgets.

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“All of this momentum will benefit consumers because retailers are so crowded,” he said. “This weekend there will be a big push from retailers who have excess inventory to sell at all costs as they look to start 2023 leaner and from the affluent, especially as the economic headwinds worsen.”

It’s also costly for retailers to sit on an oversupply of goods for too long. Retailers who stock goods in their own warehouses and distribution centers have limited space to work with, with some wiggle room to accommodate excess inventory. But the costs add up when more space is needed for a protracted flood they can’t clear quickly.

Also, unsold products lose value over time. That’s especially true when it comes to fashion-forward clothing, as savvy shoppers won’t buy last year’s style once the trend is over. Stores are then forced to discount heavily, affecting profitability.

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

“I’ve been watching the holiday season for 20 years and I’ve never seen such dramatic discounts,” 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 must seize every opportunity now to get consumers to buy.”

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

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

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Walmart (WMT), Target (TGT), Gap (GPS), Macy’s (M) and Kohl’s (KSS) all struggle with clothing oversupply year-round. This likely means that prices for winter clothing such as coats, sweaters, boots, scarves and hats will continue to drop as chain stores try to switch to fresh spring and summer goods in the new year.

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

But before you rush to snag some New Year’s bargains, Davis offered this advice: “Check the return policy. We’ve seen retailers either shorten the window from 30-60 days to 15 days or call it a sale.”

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