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The Best Christmas Shopping Deals

Tom Van Riper, 11.04.10, 02:15 PM EDT

Jeans, toys and PCs lead a slew of products retailers are slashing prices on.

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Slide Show: The Best Christmas Shopping Deals

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Yes, the economy is a bit better. Compared to a year ago, the market is up and employment is holding steady. So is this the Christmas retailers have been waiting for?

No, not really. Employment rates aren’t dropping they way they were, but they’re not climbing either. Shoppers are still cautious. And so, say industry experts, 2010 is shaping up as another big discounting year at the major retail chains.

CHRISTMAS STORE

To get shoppers in and merchandise out, there’s no other way. Price cuts are already underway, a barely interrupted extension of back-to-school season. Among those items showing the biggest markdowns through the fall: denim clothing, toys and winter wear like sweaters and flannel shirts.

Slide Show: The Best Christmas Shopping Deals

Abercrombie & Fitch ( ANFnews people ) and Hollister are among the clothiers marking down jeans and flannels, according to independent retail analyst Jennifer Black. Some of the recent deals out there: A&F discounting jeans and jeggings–most are $10 off after sales reported as high as 40% in October; Walmart is touting the HP Black Pavilion desktop for $448, a $50 savings; at Musicboxattic.com, you’ll find various music and jewelry boxes that normally go for over $200 available for $129 to $139.

Expect it all to build to a crescendo that will hit on Black Friday–Nov. 26, the day after Thanksgiving. “I believe we will see the biggest Black Friday in history,” says Britt Beemer, chairman of America’s Research Group, an industry tracking group. One segment that figures to be mostly immune to big price cuts: luxury. Sales of high-end jewelry and clothing to upscale customers correlate tightly with the capital markets, which have largely rebounded. But for everyone else, the price point still rules the day.

Most major retailers began heavy discounting in October. Specific sales often vary from week to week, so the latest deals may differ from what will be out there later in November and in December. But don’t expect the overall level of discounting to change much as Christmas draws closer–most of it on mass-market gifts like kitchenware, jeans and kids’ stuff. J.C. Penney ( JCP – – people ) news and Amazon.com ( AMZN – news – people ) are touting price cuts of 20% to 70% for popular toys like Buzz Lightyear figures and Matchbox trucks.

Once again, many shoppers are only buying the deals. “The consumer continues to deleverage and use the credit card less,” says Howard Davidowitz, president of New York-based retail consultant and investment bank Davidowitz & Associates. The inevitable response by retailers: slashing prices.

“This holiday season will be very promotional once again, perhaps even more so than last year,” says Black in her latest research note. And she’s not particularly confident that customers drawn by sales will open their wallets for full-priced merchandise once inside the store. Layaway programs, dusted off a couple of years ago after seemingly fading into in the sunset during the go-go years, are still around in 2010. Sears, among others, is offering layaway programs to get customers to make big-ticket Christmas purchases now.

CHRISTMAS DEALS AND DISCOUNTS