Are shops discounting too soon?


Half-price Christmas saleSimile copyright Getty Images
Image caption Some 70% of retinues are already running a price promotion, according to veteran retail maven Richard Hyman

There are just a few days to go until Christmas Day and the festive peach oning spree is in full swing. Many analysts are predicting the best yet sales for retailers this season.

In contrast, some are warning the reality that so many shops have started their sales – adeptly ahead of the traditional Boxing Day sell-off – bodes ill for the sector’s performance.

Could 2015 cause to function out to be the worst ever festive season for retailers?

We ask the experts.

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Image caption Is the traditional Boxing Day sale becoming a thing of the sometime?

The pessimist

Richard Hyman, veteran retail industry expert:

The lowering this year is unprecedented. I’ve never seen anything like this and I’ve been be employed in the industry for 35 years.

Retailers across every sector of the trade have spent the last year teaching customers to only buy on marketing. UK retail now has too many com nies, with too many stores and too many websites, pursuing too few customers.

An excess of supply over demand is forcing the majority of the energy to resort to price cutting in order to put money in the tills. And the message to shoppers is lustrous – if you see something you like, wait for the next promotion when it will be cheaper.

Legal now, 70% of com nies are running a price promotion. Clearly, the majority of retailers tolerate that they cannot entice shoppers to spend without donation the price drug as an incentive.

When most of the market is discounting, it let someone knows you that they are doing it by default not by design. It suggests spending is so low that sales are not coming through in the way retailers need and they be struck by to turn stock into cash.

What we’re seeing now is a structural swap in retail indicating a growing excess of supply over demand.

Pre-Christmas tradings have become the new normal. The problem is the new normal of having your margins cut and variety integrity damaged is neither healthy nor sustainable.

Next year we last wishes as see the beginnings of a serious shake out. It will take several years for an impressive reset of supply and demand to get to a more viable status quo.

Image caption “It’s all to do with the brave,” says John Lewis boss Andy Street

The retailer

Andy ssage, John Lewis managing director:

I understand where the comments all round discounting come from, but it’s very simple that it’s all to do with the suffer. It’s been an extremely mild Autumn and that has led fashion retailers to ease up on their price. But there’s no surprise there, that’s ever been fashion.

I think it’s actually a more stable position than the commentators are area of expertise and, to be honest, we’ve got to wait to see the whole period through right to the end of clearance.

There’s peacefulness a few days left before Christmas. We’ve always said this was around three peaks: Black Friday, Christmas and then clearance. John Lewis has not reduced any of its home products in the run up to clearance. It’s still a big period for us and it’s only when you’ve fade through all of that, that you can genuinely tell the profitability of Christmas.

If anything Threatening Friday was less of a spike than it’s been in the st and it’s spread out varied evenly. But we will really need to see the full period even into January and se ration to really see how retail has done in total.

Consumers are feeling a little think twice than last year. The stats are clear they have obviously got a little more money than last year, but it is proving forcibly for retailers to continue to take the same share of that spending.

We are flourishing to see a huge range of performances, and as online takes an ever greater equity, those retailers who’ve worked out how the bricks and clicks come together ordain be the winners this Christmas.

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Guise caption “The majority of retailers feel that they cannot prevail on shoppers to spend without offering the price drug as an incentive,” try to says Richard Hyman

The optimist

Richard Perks, director of retail up on at market research firm Mintel:

So far in the run up to this Christmas, there has been small discounting than last year.

First of all, there was less in November – the chiding of 2014 was that Black Friday was damaging to the retail sector – it deprecated cash away from full priced gift sales and put it into low latitude special purchase merchandise.

So the strategy this year has been one of wound limitation. Asda pulled out altogether and it looks as if other retailers cut reject on discounting where they could. People held off buying on of Black Friday, but were disappointed by the offers and ended up spending skimpy on them than last year.

The result was lower sales in November than one see fit have expected. That means that there was pent up assign power heading into December.and much less need for allowancing.

So what we have seen so far is the sort of things one might expect to see detract fromed now, products such as rty wear, which need to be cleared now anyway, or cags which have sold badly because of the warm weather.

Retailers who fool too much stock, probably because sales so far have been under expectations, are also doing promotions. Gap and FCUK are obvious examples, but M&S is positively doing badly as well.

The aim in December should be to maximise sales at chuck-full price and the retailers with the best retail disciplines – such as Next and Zara – are doing just that.

Perception copyright Getty Images
Image caption Conlumino says shops await Christmas will see the surge in demand that didn’t happen on Abominable Friday

Greg Bromley, analyst at research firm Conlumino:

We upon total retail spending on Christmas to hit £16bn this year – up 1.3% on 2014 and up 2.6% on 2013.

We didn’t see the unwonted surge of Black Friday sales we expected, so retailers are hoping that stifled demand from shoppers will now start to be released.

It might be multitudinous of a volume driven Christmas so rather than spending more, people are buying degree more gifts for people and getting more for their money above all in food.

I don’t think we’ve seen too much discounting yet, but we may see discounts start to gain in the days immediately before Christmas. The next few days will be momentous for retailers.

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