Even though economists have reported modest gains in consumer confidence, most observers don't believe consumers will start spending heavily again without the major incentives manufacturers and retailers were forced to offer during the past recession to keep spending afloat. Discounts in interest rates are the primary reason why housing has done so well, and zero-percent financing is one of the main reasons automotive sales have stayed steady-yet the appeal seems to be wearing off. So what happens when retailers eventually take these incentives away?

Price incentives are great for consumers, but they cause businesses to take a temporary hit on the bottom line. For certain, incentives have kept consumers spending, but since they get more for their dollar, overall sales aren't as high. Now analysts wonder what negative impact recent price wars and incentives might have on the future of retail once the carrot gets taken away and consumers lose their expected discounts.