Consumers Brace for Fewer Holiday Discounts
Retailers Rein in Discounts for Holiday Shoppers
Due to supply-chain delays, persistent inflation, and strong demand, discounts will be harder for consumers to find this holiday season. Most products, from apparel to toys, are expected to sell for full price or close to it.
Macy’s (M), The Gap (GPS), and a host of other retailers and brands are scaling back their traditional discounts this holiday season. This marks a big departure for retailers, which for years offered large discounts and promotions during the holidays.
Retailers Try to Change Consumer Behavior
Prior to the pandemic, retailers were reliant on discounts to drum up sales during the holiday season, with consumers waiting to make purchases until holiday deals hit. But given changing market conditions, retailers are working to change these shopping habits. Home Depot (HD) has been transitioning away from discounts for several years, but those efforts sped up during the pandemic.
Due to issues with the supply chain, consumers are likely to end up paying more for sought-after items this holiday season. However, this may not be the case for all products. If certain seasonal items arrive late because of shipping delays, retailers will probably offer big discounts on these products.
Lack of Inventory Causes Concerns
The lack of discounts this holiday season will boost retailers’ margins, but it could hurt companies if these trends prompt consumers to spend less during the holidays. Consumers are also facing a lack of inventory, which could be frustrating. Since January 2020, out-of-stock messages online are up 172%.
Retailers have pricing power thanks to pent-up demand this holiday season. For now, consumers seem willing to shoulder the extra costs. It will be interesting to see if that continues as we head toward the busiest months for holiday shopping.
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS21102601
All your finances.
All in one app.
App Store rating
