UK consumers are benefiting from “record levels” of pre-Christmas discounting in 2018, according to analysis of more than 800,000 products by Deloitte.
Deloitte found that retail discounts currently average 43.6% and by Christmas Eve that could rise to 48%, a new record.
According to the accounting firm, the record levels have been driven by an over-supply of unwanted stock caused in part by the “mild winter weather”. In addition, “varying levels of success of promotional events” such as Black Friday, as well as “general economic and business uncertainty”, have encouraged retailers to cut prices in order to shift unsold stock.
Deloitte’s MarkdownEdge analysis found that currently discounts are ranging from less than 2% to over 80%. The analysis predicts these will continue to grow in number and size, with average discounts of more than 52% anticipated from Boxing Day onwards.
Jason Gordon, lead consumer analytics partner at Deloitte, said: “In recent years consumers have come to expect retailers to heavily discount products in the lead up to Christmas.
“Christmas falling on a Tuesday, shorter Sunday opening hours and many choosing the weekend prior to Christmas to travel to friends or family will complicate the last few crucial days trading. This is why we expect retailers to ramp up their discounting earlier than normal in an attempt to clear stock.
“On the one hand, deeper discounting is clearly good news for consumers, but at the same time retailers are seeing margins eroded, significantly for some, at a time when sales volumes should be peaking.
He added: “Against a backdrop of considerable business uncertainty across the sector, many retailers will extend their Christmas sales deep into January, with some having little option but to run through early February and even beyond. While this is unprecedented, it will not be a surprise.”