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Early discounting has got to stop

The early deep discount fever that is sweeping the nation has got to stop, writes Victoria Gallagher.

This week Dorothy Perkins launched its mid-season Sale much to the discontent of the brands that operate in its stores via concessions. But the season has only just begun and, after a hot weekend last week, autumn 12 product hasn’t even been given the chance to sell.

It may help drive footfall but cutting 40% off stock, like Dorothy Perkins has, is a huge gamble.

There are of course the well-trodden arguments that Drapers and other have raised: with lower margins, you must you attract a far higher number of shoppers in, even if it results in generating the same turnover.

Then this the longer-term impact, which is already starting to show, of reputational damage. If discounts and promotions are perceived to be de rigeur by consumers they will become reluctant to buy anything at full price as they know - or expect - a Sale to be just around the corner.

Subconsciously, they begin to devalue the items in their mind, so that an item they may once have happily handed over £100 for seems expensive if it’s anything more than £50.

But as we see in this week’s story, retailers are also playing with fire when it comes to the brands they stock. Drapers heard from one who said she would not expand her offer within Dorothy Perkins while this strategy remained; another said they were considering pulling out completely.

If the best brands start to pull out knowing they can sell their items at full price for longer elsewhere, DP and other retailers like it will be left without the same pulling power. And so that vicious circle gets that bit more nasty.

The problem is how to break that cycle. We’ve seen some retailers review their discounting strategy and break with their addiction to discounting, but the habit is hard to break.

Perhaps, as with other addictions, regulation should be introduced to moderate the amount of time a business can go on Sale. No one retailer can jump the gun, and consumers will know that if something has just hit the rails, it will be full price for more than a week.

Indeed, this practice is already in place in France, where Sales are regulated by the state and are held over just two periods a year. The bi-annual Sales are held for a period of six weeks with one taking place in winter and another in summer.

When money is tight and convincing the consumer to part with what little disposable cash they have in your store, it’s easy to understand why retailers resort to discounting - but the long term health of the high street will continue to suffer as long as they keep offering early, and deep, Sales.

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