Huge After-Christmas Discounts Won’t Exist This Year

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Robert and Yvonne McGillis of Oakland choose gift wraps during post-Christmas sale in San Leandro
Robert and Yvonne McGillis of Oakland choose gift wraps, taking advantage of after-Christmas sales at a Target Store in the Bay Fair Mall in San Leandro, California December 26, 2011.

Deep discounts and deals that occur after Christmas might not happen this year as the global supply chain woes that have been plaguing retailers throughout the holiday shopping season have put a wrench in shoppers’ plans to score clearance merchandise.

January is typically the time that consumers are able to save big as retailers cut prices on overstocked holiday items as they clear the shelves making way for spring merchandise.

Items such as coats, sweaters, pajamas, boots, and holiday gadgets are discounted, often as much as 75% to 80% off, making it a boon for shoppers looking for huge savings after the holidays.

But this year will be a lot different as retailers have smaller inventories that they are juggling with many products already out of stock heading into the peak shopping weeks of the holiday season.

CNN noted that supply chain issues for retailers like Gap Inc. have slowed merchandise to consumers due to backlogs at ports and COVID-related factory closures, costing upwards of $300 million in lost sales.

But some unsold merchandise may not be moved to clearance bins, as Gap said it would consider packing it up and storing it for next year, CNN reported.

“If we think that things are going to be too late for the holiday season, we won't put them in stores or online and have them generate markdowns. Instead, we'll hold them for next year,” Gap's chief financial officer Katrina O'Connell said on Nov. 24 in an earnings call.

Compounding the issue was the reduced amount of Black Friday deals shoppers saw over the Thanksgiving weekend. Retailers have realized that consumer demand is strong, and the need to provide incentives to buy products with sales and discounts is not necessary to get merchandise out the doors of their stores.

“Demand is there right now,” Michael Brown, partner at consulting firm Kearney, told CNN. “So retailers are looking to optimize their margins on the merchandise that they have, based on lack of supply and strong demand.”

Overall, Black Friday shoppers were down in stores and online, as 179.8 million unique consumers made purchases during the holiday weekend, according to the National Retail Federation, down from 185.4 million in 2020.

An average of $301.27 was spent on holiday-related purchases such as gifts, decor, apparel, and toys, down from $311.75 in 2020, according to the NRF.

Robert and Yvonne McGillis of Oakland choose gift wraps during post-Christmas sale in San Leandro


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