Get ready for a discounted Christmas! The high street majors, including M&S, Bhs, Debenhams and Topshop, have already begun in-store promotions, discounting slower selling lines such as knitwear and outerwear. Further reductions and promotions in the run up to Christmas will mean fashion bargains galore this holiday season. Great news for consumers, but at the economic expense for retailers, who are using promotions to drive footflow and sell their stock.
This week’s BDO High Street Sales Tracker showed that overall sales at clothing and footwear retailers were down 6.7% for the week ending October 30. This is likely to put further pressure on retailers to look to discounting to kickstart consumer spending ahead of a particularly critical festive trading season.
According to Drapers, Retailers are going into the fourth quarter with more stock than they would have done because of the warmer weather, said Maureen Hinton, retail analyst at Verdict Research. Propensity to discount was being pushed by a drop in consumer confidence and the need to give consumers an incentive to buy.
Peel Hunt retail analyst John Stevenson has pointed out that consumers are shopping only when they need to, causing high street retailers to start discounting across categories such as outerwear. He said: “I’m not immediately concerned about stock levels at the moment but the weather really needs to hit or else markdown will come and shoppers will just buy around the promotions.”
Stevenson added that the critical point would be after Christmas trading, conventionally retailers’ rent quarter. He said: “I think banks could be looking to close some poorly performing indies and some privately owned companies.”
Ken Bartle, chief executive of footwear chain Jones Bootmaker, said October trade had started off badly but the half term had helped to boost sales towards the end of the month. “Everyone is spreading doom and gloom which doesn’t help the retail position,” he added. “We are not downbeat. If the weather is half decent it won’t be comfortable but it won’t be a disaster.”
Colin Temple, managing director of footwear chain Schuh, warned against promoting too soon. “If you start a Sale too early you’ll get Sale fatigue,” he said. “People that go on Sale too early could have a tough January.”
Another industry source said many retailers would be using promotions to drive footfall, highlighting lower-priced items at the front of stores. “I think snow [last year] will play a part in making the figures look better,” the source added. “No one is holding out for a bumper Christmas.”
Image: Topshop sale