DISCOUNTING activity in the crucial run-up to Christmas has begun in earnest as new figures out yesterday showed that nearly three quarters of retailers were now holding sales in a last-minute bid to win over shoppers.
PwC said 72 per cent of the 100 high street retailers surveyed were now on sale or holding promotions such as three for the price of two – slightly down from the 76 per cent seen this time last year and 2011.
However, average price discounts being advertised rose to 46 per cent, compared with 42 per cent last week and up from 44 per cent last year.
Meanwhile Marks & Spencer is expected to launch sales of up to 30 per cent on all clothing this Saturday, sources confirmed yesterday, fuelling fears of worse-than-expected trading across its key department, which is undergoing a major turnaround.
Debenhams also has a half-price sale on beauty and fragrance while House of Fraser has cut prices by as much as 75 per cent.
Gap and Austin Reed are also offering up to 60 per cent off selected items while H&M has also kicked off the sale season, putting up its well-known red posters.
“As we all get ready for that frantic last weekend of shopping before the big day – it appears that despite much more positive economic news, the level of discounting seems broadly in line with last year, proving that promotions are still a key weapon to drive footfall,” PwC’s Mark Hudson said.
“Expect to see further sale activity on the final two days as savvy last minute shoppers hold out for pre-Christmas bargains,” he said.
The discounts follow raft of downgrades by City analysts yesterday amid fears that the promotional activity, together with the mild weather and continued weak consumer confidence would put pressure on margins.
Oriel cut its full-year pre-tax profit forecast for Debenhams by £155m to £135 while UBS slashed its forecast for Marks & Spencer by four per cent to £665m.