by Katherine Masters
Last-minute shoppers looking for bargains before Christmas may find smaller discounts and fewer sale items at major retailers, including Macy’s
MN , Target TGT.N and Ulta Beauty ULTA.N , according to an analyst and two data sets measuring recent retailer pricing.
After ramping up promotions for Black Friday, some of the country’s top gift destinations reduced both the number and size of their markdowns on key products between November 1 and December 1, according to data from Centric Market Intelligence, formerly StyleSage, which analyzes retailers, brands, online trends and products worldwide.
At Macy’s, sale products fell from 49% to 46%, and the average markdown fell from 20% to 17% during this period. At Ulta, sale items went from 10% to 5%, while the average discount fell from 3% to 2%.
Data analytics firm Vertical Knowledge, which examines prices and discounts on retailer websites, found that retailers such as Abercrombie & Fitch ANF.N and Macy’s-owned Bloomingdale’s have also reduced or maintained their average product discounts from November to December, after increasing markdowns last year.
Retailers could potentially adjust their discounts to try to attract price-sensitive shoppers in the days leading up to Christmas. But so far, “what’s interesting this year is that even though we’re in a promotional environment, the promotions haven’t been very big,” said Jessica Ramirez, senior research analyst for Jane Hali & Associates.
The decision to reduce discounts ahead of the Saturday before Christmas – dubbed “Super Saturday” and typically one of the busiest shopping days of the year – highlights the challenges retailers face as discount rates Higher interest rates and other financial pressures are weighing on consumer spending.
Promotions were key to attracting shoppers during key periods such as back-to-school and Black Friday, Nike executives told investors Thursday in a conference call after the earnings release.
But reducing discounts in December is one way to increase profits, especially since Black Friday discounts started as early as October for many retailers.
“People who are very price sensitive have already made their purchases,” said Brian Yacktman, president of YCG Investments, which owns shares of retailers including Nike, Amazon and LVMH LVMH.PA . And since this year’s Super Saturday falls just two days before Christmas, procrastinators are less likely to worry about the cost.
“They are at a point of inelastic demand where they are willing to pay anything to get the gift” if buyers really need it, Mr. Yacktman said. “This is a good opportunity for retailers looking to recoup their margins
FEWER BUYERS AND FEWER DISCOUNTS
U.S. retailers are expecting 142 million shoppers for Super Saturday, a 10% drop from last year, according to the trade group National Retail Federation. Analysts say store traffic has declined in recent days compared to last year at chains such as Best Buy BBY.N and Home Depot HD.N .
Overall, consumers are buying less. Revenue for the 2023 holiday season is 6% lower than last year, and unit sales are 5% lower, according to early data from Circana.
Ben Gibson, a pharmacist in San Antonio, Texas, said Thursday he was looking at prices for video cameras and a tripod at Walmart WMT.N and Best Buy. He said he might buy one he found on Amazon AMZN.O instead.
Stacey Powells, of Mammoth Lakes, Calif., said Thursday she hasn’t seen good prices for gifts for her grandson.
Retailers have spent the last year shedding excess inventory and reducing orders in anticipation of lower Christmas sales, allowing them to focus more on increasing margins than the need to convincing inflation-plagued buyers to splurge.
Nike NKE.N is one of the retailers offering fewer discounts as of Dec. 10 than last year, when its website advertised up to 50 percent off last-minute gifts, according to data from Jane Hali & Associates .
As of Friday, most discounts on the U.S. site were between 14% and 30%, including a 24% discount on women’s leggings from the Zenvy line, which are typically priced at $100 or more.