It seems inevitable already that this Christmas will be the worst the industry has collectively faced in decades.
There will be some happy exceptions of course but in the main the high street has pretty much no hope of making last year’s numbers, due to the almost frenzied level of discounting taking place at the moment.
Unless they are hopeless optimists, most will have bought stock roughly in line with last year’s Christmas trading, so these special promotions, friends and family discounts or however they’re being dressed up mean it will be almost impossible for retailers to get the returns of 12 months ago. Especially as the discounting looks set to continue apace. In the space of 15 minutes two more 30% off vouchers have appeared in my inbox.
It would be easy to say retailers should hold their nerve and not cut their prices and it is completely understandable that the smaller retailers who are not in a position to follow suit should feel frustrated, but market conditions are brutal. As Marks & Spencer chairman Sir Stuart Rose said at the Drapers Fashion Summit last week, you can either sit back and watch others do it or get out there and fight for your share of the nation’s depleted wallet.
The government is trying to do its bit by cutting VAT, which consumers will welcome, but the prospect of a £100 coat now costing £97.90 isn’t going to trigger a stampede to the shops. Only 20% off everything at M&S seems to have that (short term) effect – footfall fell considerably over the weekend after the M&S one-day Sale. When it comes to discounting, never have the words damned if you do and damned if you don’t rung so true.