“High street retailers have their PR spot on.”
It is well known that when we buy things we tend to find relative price comparisons easier than global ones. It is easier to choose between an expensive suit, or a less expensive one, than it is to choose between a suit and a new stereo. We naturally try to avoid difficult comparisons and favour easy ones. We just love easy comparisons and what could be easier than paying the full price, or paying 25%, or more, less?
According to the Financial Times retailers are discounting more heavily than ever at the moment. Apparently, there are now 73% of stores on sale, or advertising discounts, compared with 70% last year and 40% in 2009. This shows a certain competitive spirit, if not deteriorating trading conditions, on the high street. The average discount is up too, from 45% a couple of years ago to 47% now. Some even going as far as 50%, or even 70% off.
Retailers are blaming everything from the Olympics to the weather for the downturn in sales. In London, Ramadan, in mid-July, is also cited as a reason to move old stock now so they can have new stock in store for visiting Middle Eastern shoppers.
The problem with all this % discounting is that we all know that sales price inflation tends to occur before discounting in order to get back to the number retailers first thought of. I wonder if headline retail prices have gone up in proportion with discounts? I personally try very hard to ignore the big discount percentages and work out if whatever I am buying is worth the price, at least to me. Marx’s dialectic analysis of value might struggle to explain all this as we try and spot the real value beneath the discount sticker price.
The discount label of course makes us feel that, relatively, we are going to get a good deal and we choose to ignore the annoying little worry in the back of our head that the discount may in fact not be quite as real as it seems. We can sense a bargain and so off we go and borrow yet more money to keep the retail merry-go-round spinning, because, in faint imitation of stock market speculators playing their Ponzi games, we sense a bargain.
I must hand it to the high street marketing machine though, the “tough times” positioning and the implied inevitability of bargains is a great story and one that is crafted to deliver the strong message that shoppers have never had it so good. Who could resist that?
Who benefits (Cui Bono) from messages of doom and gloom on the high street? Well, the high street retailers of course. They may have to shout a little louder these days to get our attention, but before we offer them too much sympathy let’s just see how they actually do over the summer shall we? My guess is that they will do rather well.