- Retailers are carrying significantly less stock this Christmas
- Consumers should expect fewer discounts at the more successful retailers, who won’t need to cut prices to shift stock
This will be the most under stocked Christmas in recent years according to the head of retail at KPMG, David McCorquodale.
He says retailers have slashed their stock holdings after concerns they will have to carry the can on costs if shoppers remain cautious about their spending this Christmas. This trend may mean less extensive sale racks at the more successful shops and a shortage of sizes in the more popular fashion ranges.
David McCorquodale, head of retail at KPMG said: “Retailers don’t want to be left holding the baby this Christmas and so most have kept stock holdings down to a real minimum. They are desperate to avoid the deep discounting of previous years when a combination of over ordering and depressed consumer spending left too much surplus stock on the shelves and they had to slash prices to shift it.
“Merchandising departments, working closely in association with those responsible for targeted promotions, have been given a greater influence than buying departments to manage stock levels and margins. This improved management of stock means the most successful retailers on the high street won’t need to discount as extensively or as deeply this year, so it’s likely shoppers will only find real bargains at the less successful players, whose ranges aren’t as good or who have over ordered.”
As well as concerns over depressed consumer spending, the dwindling availability of credit insurance has seen retailers finance the purchase of stock themselves, which has increased pressure to hold as little stock as possible. It has also had an impact on the relationship between supplier and retailer as they work together to manage supply lines.
McCorquodale said: “Retailers in the fashion world tell me they are carrying 3% to 4% less stock in comparison to this time last year. This might sounds like a small percentage, but this reduction will save these retailers millions in wasted margin.”
McCorquodale concluded: “The end game has to be a shop that looks stocked on Christmas Eve, but supported by a storeroom that’s nearly empty. This cut throat approach to costs means the cold reality is some shoppers, who hold off for a discount, may simply not get what they want this Christmas.”
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