Buyers’ market as shops fight for their futures
Sam Meadows Tony Diver SHOPPERS are enjoying the biggest ever drop in prices, new figures show, as businesses try to weather the coronavirus storm by enticing customers.
Retailers have been hit hard in the crisis, with stores closed and lockdown giving consumers little incentive to spend on items such as clothing and beauty products.
In a bid to lure them back to buying, there has been a rush of online sales and deals.
John Lewis is offering 50 per cent off popular menswear brands, including Levi’s and Barbour, and Next has put more than 1,000 items on clearance, according to discount website Hotukdeals. Marks
& Spencer customers, meanwhile, are being offered 20 per cent off if they spend £999 on garden
The British Retail Consortium said that promotions had led to the biggest monthly drop in shop prices since it started tracking data in 2006. Nonfood goods fell in price by 4.6 per cent last month, according to the Nielsen shop price index, published today. Helen Dickinson, BRC chief executive, said: “Clothing and furniture saw the biggest drop as retailers ran promotions to encourage consumer spending and attempted to mitigate recent losses.” She added that consumer demand was expected to “remain weak” after non-essential shops reopen, and that retailers face an “uphill battle” to provide value despite rising costs.
Some shops that were afforded essential status by the Government but had chosen to stay closed reopened this week. Ikea and Decathlon opened some stores on Monday, and a further 100 Halfords shops opened yesterday. The majority of non-essential retailers can open from June 15, but must implement safety measures.
Hotukdeals said that the number of offers on its site in May was up 16 per cent on last year, with those on fashion goods up by 39 per cent. Fellow discount site Vouchercodes.co.uk hosted 10 per cent more retailer offers in May than April, with the biggest boost coming in baby and child, flowers and gifts and home and garden categories. Marco Amasanti, of analysts Mintel, said that furniture retailers were having to deal with the effects of the pandemic, while also competing with online marketplaces. “Spending £1,000 on a sofa is not near the top of the list of priorities at the moment,” he said.
Clothing retailers have slashed prices in a bid to shift stock as demand has slowed to a trickle. Richard Lim, of analysts Retail Economics, said: “Not only have retailers been hit by store closures, but the lockdown has completely eradicated the need for people to buy new outfits.”
Chana Baram, of Mintel, said: “Many stores will use discounting to entice people in – perhaps by offering special ‘in-store only’ offers.”
Hotukdeals said the five categories with the largest rise in deals from May 2019 to May 2020 were culture and leisure, fashion, gaming, electronics and groceries.
Tom Church, the founder of Latestdeals.co.uk, said he expected more discounts in the future. He added: “It’s given online retailers a huge advantage in gaining millions of new customers.” Chris Elliott, of analysts Edge Price & Promo, said that there were more promotions being offered on beauty products, citing a greater range of offers from Superdrug.
“Because people have not been leaving the house as much, demand for cosmetics and fragrance is down,” he added. “Retailers are offering more promotions, up 10 per cent year-onyear, to encourage shoppers to stock up before lockdown restrictions are significantly reduced.” The one area that bucks the trend is food shopping, where the relatively low number of promotions has pushed consumer spend on discounted goods to record lows, according to Mike Watkins of Nielsen.