Customers vs. Companies

Businessweek asks who will blink first this holiday season?

After putting too much merchandise on the shelves for the past three years and being forced to discount heavily, purveyors of everything from women's leather coats to high-end televisions are being conservative this year. Many have cut inventories sharply, hoping to keep prices firm and profits decent — even if that means losing revenues when popular items sell out. Says Michael Keefe, CEO of Hilco Merchant Resources, an inventory-management company: "Retailers want to create a sense of urgency so shoppers will buy early and not try and wait them out."

On the really hot items, companies may have a chance. Consumers are a tough bunch to please, but will usually buy that one thing that is so important to someone on their list, regardless of price. For most things though, I bet the companies flinch first.

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