According to the Wall Street Journal, shoppers and stores are playing chicken again this year. Stores don’t want to discount, but shoppers won’t buy until they do:
Nine of 10 people waiting to finish their holiday shopping are doing so to get discounts of at least 50%, according to a survey released Thursday by UBS and market researcher America’s Research Group Ltd. A third of respondents said they are holding out for a 70% discount.
Retailers are reluctant to hit the panic button. So far, they have avoided drastic price cuts by hewing to carefully planned promotions and limiting inventories. But if shoppers aren’t out in force this weekend, many mall-based clothing retailers have arranged contingency plans for additional sales and markdowns.
Nine out of ten shoppers are confident they can get things at half price if they just wait, and one third think they can get things at 30% of the price. And since people who are waiting can easily continue to wait, it looks like the stores will blink first.
(The next stage in frugality would be to delay your Christmas by about forty-five days. I imagine the January sales will be incredible.)
A few days ago I read a book written in 2005 which mentioned that people were going nuts over 42” LCD televisions, at a cost of $9000. That same day I was walking through Sam’s Club and saw a number of 42” LCD televisions selling for less than $800. And then I read a blog entry from someone doing holiday work at an Amazon warehouse, who said that the three things he was packing most often were digital cameras, GPS devices, and iPods. That seemed odd, until a bit of poking around revealed that the prices on these and other high-ticket electronic devices have dropped dramatically this year. Here’s a table showing the drops in popular categories (the 2008 column reflects the percentage drop from 2007, and the 2009 column a further percentage drop from 2008):
It’s not technological progress that is driving these declines in price.