The 2010 holiday shopping season is seeing far more discounts and promotions compared to last year and late holiday bargains are still available, said Kimberly Greenberger, a retailer analyst at Morgan Stanley on CNBC.

The reason is that inventories are much heavier compared to 2009.  Therefore, retailers that have not sold as much as they anticipated and have huge inventories on hand are aggressively slashing prices.

Discounts and promotion are still accelerating, said Greenberger. 

They picked up last Friday and continued into Super Saturday.  During this week – just a few days before Christmas – retailers are still trying to get rid of their inventories by stepping up discounts.

In particular, teen apparel retailers like Aeropostale (NYSE:ARO) and American Eagle Outfitters (NYSE:AEO) are “aggressively discounting and promoting.” 

For retailers, their margins are under pressure.  This holiday season may be “slightly less profitable for some [of them], particularly those with bloated inventory levels,” said Greenberger.