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Holiday “discounts” aren’t enough to boost sales

2013-12-03T10:13:16+00:00

Despite the cheerleading in the media leading up to the 2013 Thanksgiving shopping weekend (which now included Thanksgiving Thursday, Black Friday, Saturday AND Sunday), the 2013 season still declined 3 percent in total dollars spent compared to 2012. More people shopped, but they spent less in aggregate. This is proof that the economy is still lousy, because people do not want to spend money in a bad economy.

And remember, a 30% or 40% discount isn’t much of a discount, anymore. Retailers price their products from a starting point which ensures that even a 70% discount will still make them a profit. This is why you rarely see discounts higher than 70 percent. If they’re selling an item for 80% off or more, it’s because they’re taking a loss just to get rid of the inventory. Most retailers would rather resell their unsold inventory to liquidation wholesalers who buy it up and cart it off, to resell it themselves, often overseas. Or the retailer may hold a charity sale, or even outright donate it for tax reasons.

So if you actually went out and shopped Thanksgiving weekend, understand that you were suckered. If it’s not marked down by at least 70 percent, you’re still paying too much.

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