Retailers Take High Road to Margins

Nov 01, 2002

By George Anderson

Retailers are going to take the high road (prices sans discounts) and concentrate their efforts on staying in-stock and delivering customer service according to an article written by Kathleen Kiley, managing editor, for KPMG’s Consumer Markets Insider.

Marshall Cohen, co-president, NPDFashionWorld in Port Washington, NY promotes this view, as well. “There was promotional panic last year, but this season I think you’ll see more full-prices and planned advertising.”

“I think you’ll see more salesmanship [this year],” says Bill Bishop, president, Willard Bishop Consulting and RW BrainTrust member. Mr. Bishop believes that retailers should be putting greater emphasis on training sales associates, rather than dropping prices and profits needlessly.

Industry groups say both ad spending and sales will be higher this holiday season.

The president of the Retail and Advertising Marketing Association in Washington, D.C., Tom Holliday told KPMG that he expects that, “There’s going to be less across-the-board discounts and better ad planning this year.” Mr. Holliday is projecting a five percent increase in ad spending this year over last.

The National Retail Federation is predicting a four percent year-over-year sales increase for the 2002 holiday selling period.

Moderator’s Comment: Will retailers refrain from manic
discounting this holiday season?



Yes and no. Most will start out looking to keep margins
high just like every other year. When sales get off to a slow start and Christmas
approaches, prices will come tumbling down. Past practices by retailers have
trained consumers to wait (and they will).

When was the last time anyone seriously considered buying
a car with a loan that was above a four percent APR?

Anderson – Moderator

Please practice The RetailWire Golden Rule when submitting your comments.

Join the Discussion!

Be the First to Comment!