Holiday sale prices continue

January 7, 2009 11:56:36 PM PST
The holidays are over, but there are still plenty of deep discounts available right now, which is very unusual for January. Here's a closer look at the forces keeping prices down.

At the Hillsdale Mall in San Mateo, all signs point in the same direction -- deep discounts can be found here.

The sales, economists say, are unprecedented. Normally, by now, retailers are marking up items as they put out fresh stock for spring. Instead, merchandise is priced way down.

"They've got tons of left over merchandise. Sweaters, things like that are no good in a few months and they have to liquidate," said Kit Yarrow, Ph.D., a consumer psychologist.

It turns out retailers ordered their inventory, even for spring before the recession hit.

According to MasterCard's spending pulse survey from November 30th to January 3rd, sales in women's apparel fell 20.2 percent, men's apparel sales dropped 11.3 percent, and sales of luxury goods were down more than 27.6 percent.

The gamble paid off for Mederois.

"I didn't buy much before Christmas. I waited until after Christmas. I got a lot of things like $300 worth of make-up and paid only $50," said Andrea Mederois, said a Belmont resident.

"You don't have to pay full price anymore and get the same deal. Just wait it out a bit," said Adlyn South, a South San Francisco resident.

According to Yarrow, it's a new retail reality that puts consumers in control of pricing for the first time in decades.

"In retailing, 75 is the new 50. In other words, consumers expect to get 75 percent off now. 50 percent off just isn't good enough anymore," said Yarrow.

Yarrow sees this trend lasting until August. By then, store managers will have not only evened out their inventory, but retailers hope prices will be marked as they should be.