Retailers to Reign In Holiday Discounts
A combination of already lowered prices, tighter
inventories and a greater focus on store and exclusive brands will enable
retailers to offer low prices without sacrificing profitability, according to analysts.
won’t be the markdowns of last year,” Cory Lipoff, executive vice president
at Hilco Merchant Resources, told the Chicago Tribune. “If
you look closely, you’ll see retailers are trying to convey value without
While many retailers are looking to get out
front and project a price image for the holiday, that does not mean they
are getting ready to give away the store.
In a letter to investors, Credit
Suisse analyst Michael Exstein wrote, “There remains a big difference between
aggressive and irrational.”
Mr. Extstein noted
that Wal-Mart has been making a public relations push around its low prices
for the holidays but, “We do not expect any irrational behavior from Wal-Mart.
The company is far more disciplined than that.”
Questions: Are you looking for more or less discounting this holiday
season versus last year? What element (store brand focus, tighter inventories,
etc.) do you think will be most critical as retailers try to maintain
margin integrity during the holiday season?