More than a quarter of floor space on the high street has been given over to discounts this March, leaving brands threatening to pull out of retailers if the aggressive markdowns continue.
A number of high street multiples have attempted to lure shoppers with discounts of up to 70% in an effort to shift spring stock while battling with cold and snowy weather.
Promotions include mid-season Sales at Coast, Dune and Warehouse, with womenswear retailer Oasis offering a mid-season Sale featuring up to 70% off selected lines. Department store chain Debenhams is holding an Easter Extravaganza with 20% off selected departments in store and online, as well as its usual mid-season half-price Sale. Marks & Spencer is also holding a 20% Easter promotion.
Ricky Attenborrow, insight analyst at research firm RetailMap, said there was a “dramatic increase” in the amount of space on promotion, coinciding with the drop in temperature in mid-March.
Early estimates suggest the total floor space dedicated to Sales will reach 26%, up from 22.1% in March 2012.
Also among the retailers slashing prices is House of Fraser, which is holding a 50% Sale, and Dorothy Perkins, which is offering up to 60% off.
One brand manager said his label had pulled out of House of Fraser for autumn 13 due to the intense discounting. “It’s doing more damage for us having stock in there than not,” he said, noting discounting during spring 13 had been particularly excessive.
“Retailers are using it to get traffic to the website and people through the doors. It is getting more aggressive,” he said. “If trade doesn’t pick up we’re going to be seeing a lot more of it, as rent and rates need to be paid. There will be even more discounting as people need to free up cash flows.”
Another young fashion brand is considering pulling out of womenswear retailer Dorothy Perkins if its discounting strategy continues. The Arcadia Group-owned retailer has held a number of promotions over the past fortnight, including a run of TV adverts highlighting price reductions of up to 30% on selected lines.
The brand manager spoken to by Drapers said: “There seems to be much more ad hoc panic discounting than last year. They keep moving the goalposts, so I’m thinking about packing it up.”
One industry source said retailers needed to “hold their nerve”.
She added: “Discounting is not going to lure people into spending. The only thing that is going to do that is the sun. All this will do is appeal to the bottom end of the market.”