Worst ever festive season for retailers

The discounting this year is extraordinary, experts in the retail industry have said. Analysts are questioning whether shops are discounting too early – asking whether 2015 could turn out to be the worst ever festive season for retailers.

Retailers across every sector of the industry have spent the last year teaching customers to only buy on sale. UK retail now has too many companies, with too many stores and too many websites, chasing too few customers.

Right now, 70% of companies are running a price promotion. Clearly, the majority of retailers feel that they cannot entice shoppers to spend without offering the price drug as an incentive.

An excess of supply over demand is forcing the majority of the industry to resort to price cutting, in order to put money in the tills. “And the message to shoppers is clear – if you see something you like, wait for the next promotion when it will be cheaper”, Richard Hyman, veteran retail industry expert said.

“When most of the market is discounting, it tells you that they are doing it by default not by design. It suggests spending is so weak that sales are not coming through in the way retailers need and they have to turn stock into cash”.

Hyman further argues that pre-Christmas sales have become the new normal. The problem is the new normal of having your margins cut and brand integrity damaged is neither healthy nor sustainable.

Meanwhile, optimistic John Lewis managing director has recently said that, “There’s still a few days left before Christmas. We’ve always said this was about three peaks: Black Friday, Christmas and then clearance”.

“If anything Black Friday was less of a spike than it’s been in the past and it’s spread out more evenly. But we will really need to see the full period even into January and clearance to really see how retail has done in total”.

TNT Business

 

Photo Credit: Alan Cleaver

 

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