Retailers are beginning to wake up to the dangers of too much blanket discounting, but tough trading conditions on the high street in the first half of 2016 have forced many into early end-of-season Sales.
As Drapers’ exclusive survey of more than 300 retailers and brands shows, businesses are struggling to resist the temptation to cut prices.
Dorothy Perkins, Topman, Tessuti, Karen Millen, LK Bennett and Dune are among those advertising Sales online and/or in stores this week, at markdowns of 20% to 60%.
“It feels like some of the big retailers have gone on Sale earlier this year,” said Fergus Patterson, managing director of Gant UK and Ireland.
“We started on Thursday [June 16], which is the same time we did last year, but some started last week or even the week before.
“We looked at going earlier but although it might add a bit in the short term, we need to be consistent for the sake of the brand. What makes you feel it a bit more is that there were quite a few retailers holding mid-season Sales in March, so it feels like there has been a prolonged Sales period.”
Manuela Carniello, retail consultant at Taking Shape Australia, agreed: “I think people are trying to hold off, but the sales still started quite early again this season. By June 9 pretty much everyone was on sale.
“Unfortunately, the sale activities can be so aggressive that when few retailers start to discount the other retailers will end up following.”
Retail analyst Richard Hyman, who monitors the discounting activity of 240 retailers across varying sectors, said around half (52%) of fashion chains and etailers are currently on Sale.
However, he noted that this has been a trend since the beginning of the year: “The last time it was below 50% was in the first week of November, when it was 49%.
“The first half of this calendar year has been the toughest six months we’ve ever seen. If someone told me it was materially less promotional, I wouldn’t believe them. I think it’s at least as promotional, if not more so – mainly unplanned promotions, or those driven by the guy next door.”
Anthony Thompson, chief executive of Fat Face, said: “I don’t think there’s been so much blanket discounting over the past few weeks, I think the weather has lifted business – it certainly has for us – and that takes away the panic. But I don’t think [discounting] is significantly reducing.
“There’s no question it’s been a difficult year: we’ve had to promote certain lines we’d rather not. We aim to be a full-price business but it’s extremely challenging when all around you are discounting.”
But he added: “I think people are waking up to the fact discounting is an issue.”
Chris O’Dea, founder of menswear independent OD’s in St Helen’s, said: “Gone are the days here you can stick to your guns. We’re here to earn money. You’ve got to move with what’s going on, you can’t just stick your head in the sand and say we’re not going on Sale, you’d lose business.
“We feel as if everyone’s gone on Sale early this season.”