Retailers Should Wait With Early Sales

Those retailers who decided to wait with markdowns ands resists early sales and heavy discounting may have found a winning strategy, according to the latest figures from traffic analyst SPSL. The latest Retail Traffic Index shows that the number of shopping trips for the week commencing December 5 was down just 1.3 per cent year-on-year, and up 5 per centt on the previous week.

Last year, many retailers held early sales to drive cashflow, leading Tim Denison, director of knowledge management at SPSL, to believe that last week's Christmas shopping figures show retailers have won a vital, covert struggle with consumers.

Denison said: "Everyone is well aware that Christmas shopping gets progressively later each year and retailers are mostly aware that they've created this situation by being panicked year by year into bigger and bigger pre-Christmas sales. Further evidence of this, if it were needed, is that shopper numbers for the last three weeks have been down against last year.

"However, retailers have taken a long hard look at this no-win situation and are stimulating cash flow with flash sales instead of full-on discounting. Consequently the deficit has narrowed and though footfall is still down this last week taken as a whole, we started to see year-on-year daily gains from Thursday onwards. "December 9 may well go down as the tipping point of Christmas trading 2004 - the date that most retailers' shared strategy of 'holding the line' started paying dividends.

"It is clear that the flash sales have injected momentum into Christmas shopping this year and the results, generally, have given retailers encouragement to hold firm and desist moving to broad scale discounting, just two weeks out. SPSL is holding its forecast that retail traffic for December as a whole will be just marginally down on 2003, by 0.3 per cent.