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Who needs Black Friday? Retailers already cutting prices

It's beginning to look a lot like (another promotional) Christmas.

Although retailers have kept inventories in check as they attempt to reverse last holiday season's margin woes, signs are already starting to emerge that they may not have broken consumers' addiction to discounts just yet.

Janney Capital Markets analyst Adrienne Yih-Tennant said in a note to investors on Wednesday that last weekend was the most promotional to date in the third quarter, with many apparel retailers offering deeper discounts than one year ago. Also Wednesday, Target announced it will for the first time offer free shipping on all orders from its website through Dec. 20, as it attempts to better compete with online behemoth Amazon.

Sale signs in the windows of a GAP store.
Scott Mlyn | CNBC
Sale signs in the windows of a GAP store.

And just last week, Wal-Mart CEO Doug McMillon pledged the big-box retailer "will be the price leader, across a broad assortment, everywhere we operate."

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Cue the dogfight over consumers' wallets.

"While August and September seemed to be generally 'on plan,' especially after a decent back-to-school, we have continued to note a greater number of 'deeper' [year-over-year] promotions during the month of October," Yih-Tennant said.

"While October should typically be sequentially deeper, as it is a clearance month, we are more concerned with an increase in 'deeper' promos year-over-year, especially given that inventory levels entering the quarter were in quite good shape for the softlines sector." Softlines include apparel, accessories and footwear.

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Gap; its Banana Republic and Old Navy brands; New York & Company; and teen retailers Abercrombie & Fitch and American Eagle were among the retailers Yih-Tennant said were discounting more heavily than they did at the same time last year. It was the third consecutive weekend that markdowns were deeper at Abercrombie, after the label had kept things in control earlier in the quarter.

"We believe retailers must rely on inventory conservatism to preserve merchandise margins and begin to control promotions better on a year-over-year basis," she said.

Regardless of how much product retailers have in store, a number of holiday surveys are pointing to the fact price will continue to be paramount for shoppers. A recent study PwC found 84 percent of consumers cited "best prices" as the main reason behind where they decide to purchase gifts. That's up from 74 percent last year, and is followed by "deals" as the second-most important factor.

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Prosper Insights & Analytics analyst Pam Goodfellow said last week that while shoppers will continue to be extremely budget conscious, because they have "a bit more wiggle room" in their budgets, they'll place a higher premium on quality this year. In other words, they're looking for good value more so than the lowest possible price.

That's something that Target's new chairman and CEO Brian Cornell is focused on giving shoppers, as the company continues its efforts to bring back the shoppers it lost following last year's data breach.

"Our value proposition will be unrivaled," he said.