Debenhams will fire a warning shot across the bows of its competitors on Wednesday by launching a pre-Christmas Spectacular promotion offering more price cuts than ever before.
Drapers has learnt that the department store chain - which factors in Spectaculars as part of its promotional strategy each year - will launch a four-day 25%-off promotion. Last year, it promised £200m worth of savings with a 20%-off promotion, originally planned for three days but subsequently extended to five.
The 2008 event kicked off a bloody battle for customer spend in the crucial festive period, when retailers were reeling from the collapse of the banking sector.
Marks & Spencer responded to Debenhams’ promotions with a 20%-off Mega Day, its first since 2004, and a raft of Sale and promotional activity from the likes of Wallis and Dorothy Perkins and department store House of Fraser followed.
Debenhams declined to comment on the details of its promotional strategy, but deputy chief executive Michael Sharp said the retailer planned to position itself as a “consumer champion” in the run-up to Christmas. He said: “We will give people January Sale value before Christmas.”
However, retailers and industry experts said last year’s deluge of promotional activity was a reactionary process, prompted by high levels of overstock as the recession worsened. This year, retailers including M&S, Next and House of Fraser have vowed to remain full-price in the run-up to Christmas.
One high-profile retailer said this year’s Debenhams Spectacular could kick off another battle for market share this year. “It will make a difference to Debenhams’ market share,” he said. “If others want market share they will have to react.”
Another retailer said customer appetite for discounts would be gauged by Debenhams’ Spectacular next week. He said: “If people react, they will react with promotions on slow-moving lines.”
One source said: “I only hope that other retailers have built in negative like-for-likes, otherwise it will be interesting.”
Targeted promotions and secret Sales such as email vouchers are expected to play a key role this Christmas. M&S gave out 12.5%-off tokens to customers this week, as part of its 125-year anniversary celebration.
Aurora Fashions executive chairman Derek Lovelock said: “I don’t think we’ll see any signs of panic on the high street this year.” He added that Aurora, which comprises chains Karen Millen, Coast, Oasis and Warehouse, would focus on planned promotions to stimulate demand.
Sainsbury’s chief executive Justin King said he expected Christmas to be “feisty” promotionally and that the supermarket’s 25%-off targeted promotions on clothing range Tu did not differ from last year.
George at Asda managing director Anthony Thompson said: “We will try and hold our nerve.” He added that he expected to see more silent Sales this year.
The number of Sales, deals, vouchers and online vouchers rose by 425% in the three months to the end of October, according to consumer site Vouchercodes.co.uk.