Thursday, November 27, 2008

[thanksgiving] who'll be thanking whom for what

Thanksgiving Day is today.

Traditionally, it is a time where family has flown in from all parts, they sit down to a grand meal and give thanks for being part of America.

Behind the scenes, this year in particular, is the retail price war. Last evening, BBC news ran an item on the "sales ambush", the tendency this year for firms like M&S and others to put on sudden sales with huge discounts, sometimes, 60-70%, on selected items.

In America, the retail chains are in such heavy competition for the dwindling dollar that they can't afford to let Thanksgiving Day slip by and so are opening late on this very day, hoping to catch the bargain shopper who is looking to Christmas shopping at bargain basement prices:

At stake is the ability for many retailers, from department stores like Macy's to specialty chains such as AnnTaylor Stores, to keep their loyal customers and eke out a profit as rivals cut prices up to 40 and 50 percent. With times this grim, some are willing to sacrifice more profit rather than risk losing clients for good.

"It's the retailers in the middle who are trying to avoid losing customers," said Anderson. "Macy's is worried about customers who have never spent a lot of money at Wal-Mart trying out Wal-Mart and liking it."

Driving this is the fear that:

Some consumers said they are putting a different emphasis on celebrating the holidays, focusing on time spent with family and friends rather than purchasing the latest hot toy or gadget. They may even choose to craft presents by hand or swap goods gathering dust in the attic to save money.

From the consumers' point of view, it is a bit galling to go in and buy a toy now for, say $50, when the regular price is $70, only to find that on Black Friday, the price is $35. This is the gist of the "sudden sales "resentment in Britain, as customers purchase items at a certain price, only to discover that next week the price has dropped substantially.

It's not that people are greedy but that they face Christmas without the cash or with the threat of redundancy and they must find a solution. Thus there is a scenario of people rushing about, hearing about a vast discount at some place, a discount which could be gone tomorrow and yet they feel no option but to down tools and get over there. This is third world stuff.

These are unsettled times.

Jon Swift has an excellent piece on Thanksgiving today.


Trubes said...

Hello James:
It makes one wonder what the true retail prices, of the items on sale are, in the first place.
I know they have to make a profit, therefore, they must still be making a good profit on 'sale prices', as they wouldn't be able to operate, otherwise, all year round.
I have scant regard for retailers in general, and always 'shop around' before making a large purchase.
Supermarkets drive me mad with their silly 3 for 2 offers etc.
This encourages people to buy more and spend more than they need. More often, a lot of the extra purchases get thrown away, thus creating more garbage to be dealt with.
I try to shop with at my local shops and find most goods, such as meat, fish and fruit and vegetables are much cheaper and of better quality.
Also, I just buy what I want when required and am not tempted by the crazy offers in the Supermarkets.


James Higham said...

Yes, if they can reduce to these prices, just to cover costs and a bit more, then what were the original markups?