Major retailers compete for Christmas business

20/11/2008

This is not just Christmas party food; this is heavy discounted M&S Christmas party food. Last week, Marks and Spencer held a one-day-only 20% off everything sale: its biggest Christmas promotion in four years.

Debenhams attempted to go one better by reducing everything in its stores by 25% for three days - it kept its stores open until midnight for the promotion. Waitrose took out full-page newspaper advertisements to announce a half-price introductory offer for its new range of chilled Christmas party food from November 19th to 25th.

This is all good news for Christmas party hosts wanting to stock up on food, party accessories and gifts, but it's potentially very bad news for the economy, as it indicates a lack of confidence in traditional consumer spending patterns in the run-up to Christmas.
Retail analyst Matthew McEachran said the tactic of promoting these kinds of dramatic discounts was "a last minute response to dire trading conditions".

Freddie George at Seymour Pierce said the M&S sale was a "clear sign that sales are well behind budget in the lead up to Christmas". The analyst downgraded his annual pre-tax profit forecast for M&S from £650m to £630m accordingly.

"Following half term, it appears, consumers have significantly reined back their spending worried about their prospects," George said. "They are delaying their Christmas shopping and hoping to benefit from the escalation of discount activity. Christmas 2008 has the feel of being the worst retailing Christmas for many years - more for the higher level of discount activity."