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Playing chicken on gift prices

Who will blink first? Sellers or buyers? As the holiday spending season enters its next-to-last stage in the coming week, many stores have been holding firm on prices. The last stage is the week after Christmas, when all bets are off.

A steadier drumbeat of more positive economic news and a strong beginning to the season have helped stores limit their discounting heading into Christmas week. While that may mean prices are higher, it also helps profit margins of those stores.

Among the top 10 most popular Black Friday online advertisement items, prices had increased about 20 percent since the traditional holiday shopping kick-off, according to Brad Wilson. He runs BradsDeals.com, an online coupon and price tracking website. A 32-inch high-definition television that was for sale at Wal-Mart the Friday after Thanksgiving for $198 was going for $289 heading into the last weekend before Christmas.

This is an annual game of chicken between shoppers and stores. But it also pits retailers against each other. Best Buy saw competitors eat into its business heading into the holiday season. No store wants to be the last one to hold firm on a price. This goes beyond the shopping malls, too. Even airline JetBlue admitted its strategy of holding out for higher holiday airfares hasn’t been as successful as it expected.

And before we entered the last weekend for holiday shopping, Kmart blinked.

The store cut prices and increased promotions on popular toys.

All this makes for a down-to-the-holiday contest of wills. Will shoppers buy, or will prices drop?

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