Consumers Get a Gift from Retailers’ Pre-Christmas Sales
Retailers (NYSEARCA:XRT) are going into overdrive to clear inventories in the pre-Christmas shopping season, and aggressive discounts are being offered by almost every retailer. “Last-minute Christmas shopping,” posted a Twitter user. “Literally everything is on sale, LOL. Knew my procrastination would come in handy some day.”
The waiting game between retailers and consumers seems to be panning out in favor of the shopper. Consider these discounts on offer at top retailers: Half off across the entire store at Ann Taylor (NYSE:ANN), 60% off at Gap (NYSE:GPS), 70% off toys at Amazon (NASDAQ:AMZN), up to 50% off gifts at Restoration Hardware, and 30% off everything at J.Crew.
According to David Bassuk, M.D. and head of retail practice at consultancy AlixPartners, “many retailers entered the season with pretty optimistic plans that shoppers would rush into stores and pay full price. But that did not pan out, and the final days before Christmas have retailers being much more aggressive in terms of promotions being offered.”
Overflowing inventories are probably a result of the uncertain economic climate with high unemployment, rising food and gas prices, and the crisis in Europe, all of which have caused shoppers to batten down on expenses, Christmas shopping included.
But the real concern is the effect of this ‘get-rid-of-stocks’ discounting on retailers’ margins. Worse, whatever stocks are left go for even lower prices post-Christmas. Surely a ‘win-win’ for the nervous shopper out there.