Pre-Christmas shopping discounts ‘could hit 50%’

Sales discounts on clothing and products in the lead up to Christmas could be the biggest in almost ten years, according to one consultancy.

Deloitte, which has monitored the prices of 800,000 products online and in shops since 2011, expects average discounts to hit 50% by Christmas Eve.

Its forecast came as data provider Springboard said shopper numbers were lower than the same time last year.

The firm said shoppers were waiting for deeper discounts before buying.

“Consumers clearly took advantage of early discounts to purchase Christmas presents, and are now waiting for discounts to deepen once again in the days immediately before Christmas as retailers do their best to shift unsold stock,” said Diane Wehrle, insights director at Springboard.

Deloitte said current discounts ranged from 8% to 78% with the biggest discounts on clothing, but said the coming weekend – the last before Christmas – could see “a tipping point in promotions”.

The consultancy said the price cuts had been driven by UK shops discounting earlier in the season due to Black Friday – the day after the American holiday of Thanksgiving, when retailers drop their prices for 24 hours. The tradition has increasingly been adopted by UK retailers too.

Deloitte said this had created a long run-up for pre-Christmas discounting, with prices falling steadily in the lead up to Christmas Day.

“Consumers have come to expect an increasing amount of pre-Christmas discounting. The result is a blending of promotions, one seeping into the next, and a steady price decline rather than a steep Boxing Day drop, reminiscent of Christmases past,” said Jason Gordon, consumer analytics partner at Deloitte.

Post Christmas, Deloitte is expecting deeper discounts, with average reductions of up to 54% on Boxing Day.

Image copyright Reuters

Retail expert Natalie Berg said the current retail environment is worrying: “This is the most important time of the year for retailers, and this is a sign of distress.”

She added that retailers have become worried and started discounting earlier due to consumers buying less, and once a few big brands start discounting, it is difficult for the rest of the High Street not to join in.

“It’s a combination of pent-up demand and the late timing of Black Friday being on 29 November, not 23 November,” she told the BBC.

“Generally, there’s been a lot of political and economic uncertainty this year so consumers have been quite cautious about spending. That pent-up demand has been released at Christmas, when you spend, but consumers have cottoned on to the fact that there will be pre-Christmas discounts now.”

But consumers might not even have to wait for the Boxing Day sales. Deloitte predicts that many Boxing Day discounts could go live online on Christmas Day itself, and on Christmas Eve in bricks and mortar shops.

“The operational challenges that sales present in-store mean some retailers could be offering Boxing Day sale prices on Christmas Eve, for those willing to hit the shops early,” says Mr Gordon.

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