Boxing Day: Big discounts expected as shops try to boost sales

Bigger discounts than normal are expected in the traditional Boxing Day sales, as shops try to make up for weak trading in the lead-up to Christmas.

On top of widespread deductions already offered by retailers, they will be forced to cut prices further to get rid of unwanted stock, say analysts.

Average discounts of “at least 52% off from Boxing Day” have been predicted by management consultancy Deloitte.

Market researchers including Mintel and Springboard also expect big discounts.

“Yes, there will be further deeper discounts on Boxing Day, that’s when it’s all got to go,” said Richard Perks, director of retail research at Mintel.

However, he cautioned that the sales would be “pretty selective” and largely focused on winter items that have not sold already.

“It’ll be things like overcoats, party wear and shoes,” he says.

Boxing Day sales are traditionally a way for shops to get rid of unwanted products, so they can bring in new stock but also, crucially, cash to pay for the new stock.

“Post-Christmas sales are incredibly important for a retailer just to keep their houses in order,” says Mr Perks.

The latest figures for Christmas Eve show that by midday, the number of shoppers overall visiting High Street shops, shopping centres and retail parks was up 6.8% on last year.

Springboard – which produces the figures – said shoppers were likely to have been tempted by the “opportunity to take advantage of the additional discounts introduced by retailers.”

Independent retail analyst Richard Hyman said the high level of pre-Christmas discounting showed the industry was “very distressed”.

“Discounts have come earlier, because retailers have far too much stock and not enough cash,” he said.

He says the number of retailers on sale, the discounts being offered and the proportion of stock involved are all higher than he has seen in his 35 years working in the retail sector.

Many of the shops are now offering money off most of the time, meaning traditional sales like Boxing Day have become “rather meaningless”, he says.

This eternal discounting also means customers are now encouraged to put off purchases, because they know if they wait, the price will come down.

TNT Business

Photo Credit: David Holt

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