Is life on the high street getting easier? Better sales figures seem to suggest so, as do better confidence data. One of the key features of this retail market is the amount of margin retailers must give away to persuade customers to part with their cash. However, our Promotional Tracker shows discounting trending down as August has unfolded – a welcome positive after a long and more widespread than usual Summer sale period. Our Tracker found that 56% of UK retailers are on sale this week. This is still a very high figure but continues the gradual falls we have identified since the 81% peak at the end of June.
A key area of falling discounts is fashion where 51% of retailers are currently on sale – the lowest since mid-April. Footwear has generally managed to maintain price integrity far better than apparel and this week we have found just 19% of shoe shops with price promotions. This is the strongest full price showing of all the retail sectors we track. Department stores are at 40% while home furnishings are down at 67% having hit almost 90% in recent weeks.
These are better figures without question but no one should get carried away. Cost growth is still running way ahead of sales and many retailers have educated their customers to expect discounts. After several years of wall to wall price promotions these expectations run deep. Margins will continue to be under severe pressure and the discount market we have become used to is very far from being over.
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