Open or not, looted or not, retailers are heading for a major discounting cycle as they look to clear piled-up stock that shuttered stores couldn’t sell and furloughed or fearful consumers wouldn’t buy.
For many retailers, the overly promotional pricing has already begun. Fashion players are pushing spring sales, feel-good discounts, pampering promotions and anything else that could entice otherwise occupied consumers to spend on clothing again.
In the U.K., some retailers have nearly all of their online product range discounted.
According to Love the Sales’ latest fortnightly report out Wednesday, which tracks sales, prices and discounts from more than 1,000 U.K. retailers, since lockdowns started, online discounts are up 20 percent year over year.
And French Connection leads the list of top 10 retailers with the biggest discounts, with 90 percent of its online merchandise currently discounted.
“French Connection is offering 25% off its Spring fashion,” the report noted. “New customers who sign up to the FC newsletter can get 10% off full-price purchases. The average discount on a French Connection sale product is an incredible 52%.”
Miss Selfridge ranked second with 83 percent of its e-commerce stock currently discounted. Items in its summer sale are up to 50 percent off, and the average discount across sale items is 48 percent off. Dorothy Perkins came third with 81 percent of its product marked down.
Men’s wear retailer Burton has 80 percent of its goods discounted. All Saints has 77 percent. Topshop is taking a percentage off of 69 percent of its clothing, Ben Sherman 64 percent, Reiss 62 percent and Converse 61 percent. The footwear retailer is offering an average of 43 percent off of its products, and simply signing up for emails gets consumers a generous 20 percent off.
Though British clothing brand Joules came last on the list, it still has more than half (58 percent) of its product range on promotion, with an average discount of 42 percent off. New customers get 10 pounds ($12.57) off of purchases over 50 pounds ($63).
The good news, according to the report, is that demand for high-street fashion has increased for the first time since lockdowns started in March.
“Searches for high street brands are up 11% year-on-year. LovetheSales.com reported a 5 year low for high-street fashion in the first weeks of May, but with clothing stores set to reopen in two weeks, demand for high street labels has increased,” the report noted. “Apparel is bouncing back, searches for luxury fashion continue to increase, rising by 22% year-on-year, whilst demand for premium brands remains the same.”
The bad news, however, is that despite demand bouncing back, discounts of this nature dim any prospects of selling a single thing to consumers at full price. Or even at moderate discounts.
Also on Wednesday, the British Retail Consortium (BRC) said shops are slashing prices at the highest rate in 14 years. Prices for products at stores fell 2.4 percent in May compared to a 1.7 percent decrease in April—both well below the 0.7 percent 12-month average price decrease.
“Shop prices in May fell at their fastest rate since 2006, which was largely driven by the drop in non-food prices,” BRC chief executive Helen Dickinson OBE, said. “Clothing and Furniture saw the biggest drop as retailers ran promotions to encourage consumer spending and attempted to mitigate recent losses.”
In the coming months, she said, prices at non-food retailers are expected to “remain deflationary with subdued sales.”
“Even as non-essential shops begin to reopen from 15 June, consumer demand is expected to remain weak and many retailers will have to fight to survive, especially with the added costs of social distancing measures,” Dickinson added. “Retailers face an uphill battle to continue to provide their customers with high quality and great value products despite mounting costs.”