Retailers slash prices in fight for festive shoppers

Research on discounts and promotions from PwC revealed that on average retailers slashed prices this week by 42%, up on last year’s 36%.

However, the number of retailers discounting has dipped year on year - from 69% to 64% - suggesting that many store groups are feeling more confident this year.

Promotions were evident at Boots, which has launched its biggest ever three-for-two offer, according to trading director for beauty Guy Farmer. New Look has already launched promotions this year, having waited until Boxing Day last year, while Debenhams has launched a 30% Sale across all departments.

New Look boss Anders Kristiansen said customers now expect discounts in the run-up to Christmas. He said: “You have to do something but nothing like what the market is doing right now. This is ridiculous. We tried to hold our nerve but in the end we had to succumb.”

PwC retail consulting leader Mark Hudson said shoppers had become dangerously accustomed to pre-Christmas promotions. “Retailers need to attract customer attention because unfortunately shoppers have got used to 40% off,” he said.

Asda marketing boss Stephen Smith said he had observed discounts across electronics and fashion in the last week. “The weather has hurt clothing because people do not feel Christmassy as it’s not been cold,” he said.

Some leading retailers insisted they would not cut prices early. Karen Millen chief executive Mike Shearwood said the fashion retailer had held prices steady so far, but he had noted a “huge amount of discounting and promotions over the past two to three weeks”.

Fat Face boss Anthony Thompson said the retailer plans to not go on Sale until after Christmas, and that some retailers are stuck in a discount cycle. “The decisions you made last Christmas impact this Christmas. We’re not feeling the pain as we didn’t discount,” he said.

Such confidence can be justified, according to Hudson. He said that, from a stock point of view, some retailers are “sitting pretty” after buying more cautiously this year.

The data monitored promotions across 100 shops on Monday and Tuesday.

WGSN INStock data showed 32% of products monitored at online women’s fashion retailers were on markdowns.

Superdrug marketing director Matt Walburn said: “This year we’ve found the market to be incredibly responsive, meaning that it’s about offering the right products at the right price, or promotion, at the right time.  Customers may have slightly more income to spend in the run up to Christmas, but they are still looking for the best value offer at a time that’s key to them.”