2013 Promotions: When do retailers hit bottom?

Every year on RetailWire, panelists have a chance to discuss stores’ promotional candence in comparison to previous years. This year’s heavy promotions may have been triggered by the short calendar between Thanksgiving and Christmas — or the perceived weakness in consumer spending — but did retailers go too far this year? Here’s my point of view:

It’s hard to imagine retailers being more promotional this year than in past years, but it does seem that the “layered” discounting (to charge customers, to “friends and family” and so forth) is deeper this year. Some of these events were obviously preplanned, others look like a late reaction to soft Black Weekend sales. (And stores’ e-commerce sites make it much easier to trigger this kind of extra promotion quickly.)

The statistics on apparel selling are interesting, because they would represent a meaningful uptick in discretionary spending. There is no doubt that cold weather is driving better-than-expected sales of coats, sweaters, gloves and boots…but with all the extra discounting ahead of “clearance season,” will stores be asking where the gross margin went?


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