British Retailers Refusing to Discount Before Christmas

Posted on November 26, 2009

British retailers had to discount so heavily during last year's holiday season, they called it Armageddon. But this year they are determined not to discount so much. That means that British shoppers will not be seeing the kind of deals they have come to expect.

Marks & Spencer Group Plc, New Look Group Ltd. and House of Fraser Ltd. are among stores that say they donít plan full-scale discounting before Dec. 25. With consumer optimism holding at an 18-month high, shoppers may still spend more in December than a year ago, according to researcher Mintel International.

"I can't see last year's level of disorder on the high street," New Look Finance Director Alistair Miller said in an interview with Bloomberg News. Going on sale before the holiday "is an absolutely suicidal move for retailers."

According to analysis conducted by PricewaterhouseCoopers LLP, only 43 percent of town-center retailers offered discounts or ran promotions this week, compared with 62 percent a year ago. Ninety of Britain's 100 biggest store owners started discounting before Christmas last year as the financial crisis that followed the collapse of Lehman Brothers Holdings Inc. caused consumers to slash their holiday budgets.

"There's much less blanket discounts this year," said Richard Dickinson, chief executive officer of the New West End Company, the organization which represents retailers in central London's main shopping district. "Stores have been much more astute about ordering. What people are doing is much more event driven and promotion driven."

Many retailers are determined to hold the line on prices and are refusing to discount at all until after Christmas. 40% of British retailers say they will discount from now until Christmas. But the discounts won't be as big as last year and the stores are doing more promotions that get people into stores than outright price-cutting.