A jacket at -50%, shoes at -20% or trousers at -15%: it’s almost time for the traditional bargain hunt. The start of the winter sales will take place next Wednesday in most of the French departments. But will the promotions be advantageous this season? It could depend… on the weather. If the temperatures remain mild in January, customers will have no head for winter clothing and will be less numerous in the stores. To bring them back, stores could be tempted to offer bigger promotions.
Especially since autumn had started very badly for commerce, especially for clothes, penalized by the already mild temperatures of October. Under the sun, customers have left the stores, leaving larger than usual stocks for some of them. Because the balances are the only time of the year in which it is legally authorized to sell at a loss. For stores, it’s an opportunity to liquidate remaining stock for the season and replenish cash to buy clothes from the new collection.
The uncertainty of consumption
Because the weather will obviously not be the only parameter to play in the promotions. We will also have to rely on inflation, the other big unknown at the beginning of the year. “Inflation cannot fail to have an effect on consumption. Either by choice or by obligation,” estimates Emmanuel Le Roch, general delegate of the Procos brand federation. The expected rise in bills could curb customers’ appetites during sales. If they buy less and inventory doesn’t go down enough, business could be better in stores.
At the same time, inflation could also induce customers… to buy more. To find good prices, sales are usually the best time. Inventories, in these cases, could be depleted at a good rate from the first markdown, which does not necessarily require liquidating prices. “There are conflicting influences, it is difficult to say in advance if one will prevail over the other”, analyzes Emmanuel Le Roch. The positioning of each brand, accustomed or not to offering low promotional prices, must also weigh in the balance.
But businesses are also worried about the increase in their bills in recent months and are working to preserve their margins, especially independent retailers. “We are going to attack sales at -30%, -40%. We don’t have the means to do more at the beginning,” explains Patrick Aboukrat, president of the Ile-de-France section of the National Garment Federation. (FNH), which represents independent companies. The head of the Abou d’Abi Bazar stores especially regrets the multiplication of commercial offers at the end of the year, such as Black Friday, which “kill” the winter sales.
No more destruction of unsold goods
Weather, inflation or Black Friday, it’s hard to say what will really affect the promotions. On the ground, in addition to these external factors, a lot will depend on brand strategies and store inventory levels. A brand that has managed its stocks well will offer less attractive promotions, and vice versa. For the past few years, brands have been trying to plan their purchases as well as possible to avoid overstocking at the end of the season: from January 2022, unsold items are no longer entitled to be destroyed for environmental reasons.
Source: BFM TV
