Blog: Leonie BarrieDo retail discounts work?

Leonie Barrie | 4 December 2008

As more and more UK retailers are turning to discounts and special promotional events to try to persuade Christmas shoppers to part with their cash (Marks & Spencer is holding its second 'One Day Christmas Spectacular' today) some industry observers are beginning to fear they might be doing serious damage to their businesses.

Like M&S, which is offering 20% of all its clothing, the UK’s second-biggest department store chain Debenhams is also slashing 20% off items over the next three days. And that’s just the tip of the iceberg, since most high street retailers fear this festive season could be the worst in recent memory. Some stores in London have even started opening at 7am to catch shoppers on their way to work, tempting them into their shops with champagne and croissants.

Are early discounts like this really such a bad idea? In the US of course they’re commonplace, recession or not, and Black Friday’s pre-dawn openings and steep discounts are as much a part of the Thanksgiving ritual as the turkey feast.

But in the UK it’s a new phenomenon – on this scale at least – at what is traditionally the retailers’ most lucrative time of the year. The fear is that consumers will hold off buying in the belief that prices might fall even further, profit margins will be squeezed, and it perhaps sets a precedent for seasons to come.

Of course a lot of retailers need to clear their stock too, and many will argue that it’s better to sell at a 20% discount now than be forced to take even more off in the January sales. And desperate times call for desperate measures – so whatever the risks of early discounting, perhaps the danger of doing nothing at all could be even worse.

 


BLOG

Trump and Brexit generate more confusion

Over the past month, Donald Trump and his team failed to offer any clear plan to ensure Americans would "Buy American, Hire American" - while the British government's attempts to clarify the specifics...

BLOG

Bangladesh works to resolve labour activist issues

The Bangladesh government was forced to respond late last week to pressure over its crackdown on labour activists after a number of global brands and retailers, including H&M and Inditex announced pla...

BLOG

US border tax a contentious issue

Fresh from their disappointment at seeing the Trans-Pacific Partnership (TPP) free trade deal abandoned last month with an executive order by President Donald Trump, the US apparel and footwear sector...

BLOG

Primark's sustainable cotton programme takes shape

With the ultimate aim of ensuring all the cotton in its products is sourced sustainably, value clothing retailer Primark is adamant that having a business model focused on offering the lowest prices o...

just-style homepage



Forgot your password?