Some Retailers Are Trimming Holiday Sales Discounts: Is This a Dangerous Play?

In a recent piece of reporting issued by Julia Waldow of Modern Retail, the concept of a divide emerging in advance of this year’s holiday sales season was brought to the fore: Certain retailers — including Caraa, Mercado Famous, and Petite Plume, among others — are planning to trim back their planned discount rates from previous positions, most often citing macroeconomic uncertainty or a lack of desired lift from offering bigger bargains in the past.

“Black Friday and Cyber Monday are big moneymakers for brands, and companies are feeling extra pressure to squeeze the most they can out of every sale in today’s economic environment. For months, brands have grappled with higher costs of goods, changes to their supply chains and low consumer confidence,” Waldow wrote.

“Retail executives know that shoppers expect promotions for Cyber Week, but they also want to ensure their balance sheets are strong going into 2026. As a result, brands are more closely scrutinizing their ‘promo math’ this year and calculating deals based on how much risk they’re comfortable taking,” she added.

The report continued to emphasize that not all retailers were taking this approach — with Essentia Organic Mattress and Natpat being singled out as two examples of brands keeping their deals in line with past levels — and that the National Retail Federation was still projecting a record $1 trillion in spend this holiday season. One caveat on the latter point, however: That record-setting spend could come from higher sticker prices, rather than actual sales volume.

Ragini Bhalla, head of brand at Creditsafe, was quoted on the matter, offering thoughts.

“Consumers need promotions to spend, but retailers can’t afford deep markdowns amid thinner inventories and tariff-inflated costs. If the expected pullback in discounts materializes, the lever that fuels holiday sales may disappear, just when shoppers are waiting for it,” she said.

Shoppers May Be Anticipating Pullbacks on Price Discounts From Retailers, But There’s More to the Story

A Gartner survey — admittedly, with a fairly modest sample size of 367 U.S. consumers, conducted this past August — showed that 40% of those polled were anticipating a pullback in terms of discounts this holiday season.

“This challenging environment requires CMOs and their teams to create campaigns that effectively convey value and connect with consumers before and during the holiday shopping season,” said Brad Jashinsky, director analyst for Gartner.

Although customers may be anticipating fewer deals, or at least less substantial ones, this Black Friday, Cyber Monday, and onward, there are still expectations at play.

On one hand, Waldow noted — citing research from Power Digital — that more than one-in-five consumers (20.7%) had halted buying from a particular brand due to “misleading” Cyber Week offers. On the other, slightly more than one-in-10 shoppers (10.6%) actually walked away from brands because overly-aggressive markdowns had “cheapened” the brand in their eyes. That’s a narrow path to navigate.

“When discounts shrink, consumers may hesitate, but when brands go too deep, they risk eroding long-term loyalty,” Bhalla suggested.

All-in-all, according to CommerceIQ, the data suggests that discounts are likely to take something of a hit as 2025 draws to an end.

“Our prediction right now is that brands are going to taper their discounting strategy,” VP of product marketing, Bill Schneider, said.

CommerceIQ noted that in Q3, prices had trended upward by 3.7% year-over-year, and discounts had fallen by 1.7% during the same time frame. “Retailers are trying to modulate these rising costs, while maintaining demand,” Schneider concluded.