Stores Cut Prices Early

With signs that retailing is in for a sluggish season, holiday discounts are already here.

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The season of indulgence is almost here, and stores are already feeling overstuffed, according to the Wharton School of the University of Pennsylvania.

Rising debt levels, a struggling real estate market, and high gas prices have turned many consumers into stingy bargain hunters, which means holiday sales could be the slowest in years, the business school reports. Plus, shop inventories are piled up after a warm fall that kept many consumers outdoors and out of the stores.

"Retail marketers, for their part, will do what they can to counter the problems and lure consumers into plunking down their cash and credit cards," Wharton says, "but ultimately their most powerful tool is the one that Wal-Mart has already resorted to: price cutting. That will mean lower profits even if traffic picks up."

For shoppers, that means more deals and discounts, just in time for the holidays.