This is the 17th trading week of 2017 and it marks the lowest promotional activity we have so far recorded. Only 50% of non-food retailers are running discounts this week – the previous 16 weeks averaged 65%. So, does herald the tipping point, when retail starts to really hit consumers with the fall out from a devalued pound?
ONS data suggest price inflation is picking up and some price increases are certainly being passed on. Our tracker reveals particular falls in the fashion and footwear sectors, both posting weekly falls in numbers promoting 2x those of the overall non-food sector. Department stores fell, but at a more modest rate. Meanwhile home markets (furnishings, DIY and electrical) remained steady.
In reading the trends, the timing of Easter is key. Last year’s post-Easter promo trend saw a sharp fall too and some of this year’s decline will certainly be a repeat of the 2016 pattern, just occurring later. Nevertheless, this year’s fall is steeper and suggests some passing on of higher costs is percolating through.
Interestingly, it is among premium retailers that the biggest fall in discounting has been recorded. Given their positioning, it is remarkable that premium retailers have been indexing at 30% or more on sale most weeks. This week’s number is 19%, the lowest we have registered since January 2016.
We expect our headline non-foods promotional index to fall below 50% in the coming weeks but don’t expect a significant move back to full price retailing. Competition is too tight, capacity too great, and demand too soft. Watch this space.
- We track retailers’ promotions daily, at sector and company level. We will be reporting on the headline, generic numbers regularly. For further details contact us at email@example.com