If you've noticed better deals this holiday season compared to last year, it's not your imagination.
National Retail Federation Chief Economist Jack Kleinhenz dove into the U.S. Department of Commerce's report for November, which found that retail sales rose 3%, to find out why the growth was lower than expected.
The culprit? Stores have been slashing prices, while selling more items.
That's good news for consumers heading into the final shopping weekend before Christmas, including Super Saturday, the busiest shopping day of the year. But it spells pain for retailers, which are already reeling from a third-quarter of meager sales gains and shrinking profit.
"While fewer dollars are coming in than expected, that doesn’t mean consumers are shopping less," Kleinhenz wrote in a blog post this week. "In fact, unit volume appears to be up. The issue is that prices are down."
Data firm Market Track analyzed for Fortune the circulars of eight major retailers—including Walmart (wmt), Macy's (m), Target (tgt), and J.C. Penney (jcp)—since early November, when the holiday season started in earnest. It led to a similar conclusion: discounts are deeper this year, particularly for clothing.
Market Track found that Penney and Macy's have largely maintained Black Friday-level discounts on apparel, a particularly important category for those two department stores, in the weeks since the shopping event. Market Track said those department stores have regularly been advertising between 50% and 70% off. (Graphic courtesy Market Track.)
The deeper discounting this year doesn't come as much of a surprise, given that the freakishly warm autumn in the Eastern half of the U.S. has prompted many shoppers to postpone, and possibly cancel, plans to buy outerwear and heavier winter clothing. (In one major market, the New York area, temperatures in December so far are roughly 12.5 degrees above normal.)
Big retailers like Target and Walmart have pledged to price match against rivals, most notably aggressive discounter Amazon.com (amzn), this season, adding to the downward pressure on prices. And to make matters worse for retailers, consumer savings from lower gas prices are going to eating out at restaurants and paying down debt, not more shopping.
Market Track found that major retailers, by and large, have made their last-week deals sweeter, after pulling back on discounts right after Black Friday weekend, compared to the same period in 2014.
The average discount across shopping categories among the eight retailers (which also includes Best Buy, Sears, and Kmart) is now 35%, compared to 34% last year. The discounts would have been even deeper if retailers had not decided to pull back on price cuts on big ticket appliances since Black Friday. (And that means the holiday is coming full circle: Market Track found that deals were deeper on Black Friday this year.)
Once again, it looks like consumers are winning a game of chicken with retailers.
True, there is still time for retailers to finish the holiday season strong. An NRF survey this week found that only 10% of U.S. consumers had completed their Christmas shopping, and the average shopper has completed 53.5% of his or her shopping. Nonetheless, bargain-hunting is deeply ingrained in consumer habits and unlikely to change six days before Christmas.
"Consumers have become conditioned to expect discounts and promotions. As the TV commercial says, nobody pays retail anymore," the NRF's Kleinhenz.
"All of this has combined to create a very deflationary atmosphere the past year or more, meaning retailers have needed to be competitive and drop prices to keep products moving off the shelves."
So shoppers, go enjoy Super Saturday. Plenty of deals to be had.