A combination of already lowered prices, tighter inventories and a greater focus on store and exclusive brands will enable retailers to offer low prices without sacrificing profitability, according to analysts.
"There won't be the markdowns of last year," Cory Lipoff, executive vice president at Hilco Merchant Resources, told the Chicago Tribune. "If you look closely, you'll see retailers are trying to convey value without discounting."
While many retailers are looking to get out front and project a price image for the holiday, that does not mean they are getting ready to give away the store.
In a letter to investors, Credit Suisse analyst Michael Exstein wrote, "There remains a big difference between aggressive and irrational."
Mr. Extstein noted that Wal-Mart has been making a public relations push around its low prices for the holidays but, "We do not expect any irrational behavior from Wal-Mart. The company is far more disciplined than that."
Discussion Questions: Are you looking for more or less discounting this holiday season versus last year? What element (store brand focus, tighter inventories, etc.) do you think will be most critical as retailers try to maintain margin integrity during the holiday season?