FSP Retail Blog

Don't Panic Captain Mainwaring!

There have been several hysteria-inducing reports released in the press over the last few weeks. About certain high streets being at risk of demise, sales feeling the pinch because of swine flu (!!) and discounting reaching dangerous levels. Most of this is old news and the rest hyperbole, so a bit of real perspective should be applied to make sense of it all.

Several industry journals have been quoting a recent report by PricewaterhouseCooper, claiming that 90% of retailers are currently ‘on sale’. While this may be true, it is not enough to simply use this figure as a shock tactic, for in actual fact, the proportion of retailers “on sale” compared to those trading at full price remains mostly unchanged from last year.

Using Global Retail’s Compshop trading stance trend figures, it is clear that although levels are slightly ahead of 2007 and 2008, the number of retailers currently discounting is by no means anymore ‘dangerous’ than in previous years. (See fig 1).  

Moreover, it is clear that retailing plays to seasonal trends, and that although long-term discounting can do more harm than good, it is natural for retailers to clear stock with end of season sales – as traditionally seen throughout July (see fig 2).

Whether heavy discounting will continue unbroken through to 2010 remains to be seen, however there is little to be gained from speculation – especially when past trends suggest the opposite. So let’s wait and see what happens before running to our panic stations; we may be pleasantly surprised.

Fig 1

Fig 2

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