Retail discounts to erode profits this week?

Now that Black Friday and Cyber Monday are over, retailers nationwide will continue the price discounting this week (and beyond) to keep those sales pouring in all the way until the end of December. Some retailers are taking the discount versus profit line this week, as 50% off is being seen at many online outlets, which is sure to cause a profit knock at the end of the day.

Is this any surprise? Not really -- loss leaders are always used to hook consumers looking for bargains into stores (and online retailer websites) where they are either ferociously upsold more expensive products or are extensively cross-sold more products than they came looking for.

It's the savvy consumer who seeks out a good bargain and leaves with just that item (or items) that retailers don't really want. But the U.S. consumer is a savvy one indeed, and the more tactics retailers use to push non-bargain products, the more consumers shrug them off.

It's been said that there are no "must have" gift products this year. These products, based on the law of supply and demand, command premium prices. When there is a lack of that kind of product, the only recourse many retailers have is to slash prices to get customers lifting up their spending. Although the holiday shopping season this year may indeed be a large one, will any companies make significant profit? Is there a goal of selling as much as possible while making very little profit in the process?