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) --


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Wal-Mart Stores

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and K-Mart, are topping this year's list of go-to destinations for holiday shopping, according to a survey released by Citigroup.

And with a whopping 70% of those surveyed citing price as their main motivation for choosing where to shop, it is, of course, no surprise that discounters reign supreme.

In fact, 80% of the survey's respondents said they require at least a 10% discount in order to justify making a purchase.

And not only are discounters wallet-friendly, they are also stocking some of this year's most popular gift-giving items, like children's toys, LCD televisions, GPS Navigators,


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iPod touch, digital cameras and gift cards.

Both Wal-Mart and Target have significantly lowered prices on their toy offerings, a category more than half of the respondents plan to purchase. Wal-Mart will be featuring 100 toys for just $10 during the holiday shopping season.

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Department stores like


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J.C. Penney

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also promise to be popular this holiday season, with 56% of those surveyed saying they will shop these locations.

Shoppers say Macy's is a Must

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Department stores could benefit from the slow return of apparel and accessories -- specifically denim, bags and shoes and boots -- which, according to the survey, rank as "hot" holiday items.

In addition, online retailers like

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are also poised to pick up market share, with 80% planning on making at least one purchase online.

It will not, however, be a Merry Christmas for all. Drugstores, which are seeing a boost during flu season, apparently won't be as lucky come the holidays. According to the survey, only 22% are planning on shopping at places like

Rite Aid

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CVS Caremark

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Citi says the category that will be the hardest hit is jewelry, which doesn't bode well for


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No matter what type of retailer, however, Citi warns that inventories may too low to meet demand as 70% of shoppers plan to start their shopping before Black Friday. This is a problem retailers would have dreamed of having last year, as they were forced to rely on heavy discounts due to inventory surpluses.

And while lower inventories may result in a weaker top line, it should help boost margins and give retailers more pricing power on must-have items.

-- Reported by Jeanine Poggi in New York

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