THIS year’s Marks & Spencer Christmas advertisement features a family sitting under the Christmas tree merrily exchanging gifts.
Strangely, though, the family reflects an odd mix of ages. There seems to be nobody over the age of 40. Is Christmas for the young only?
This happy family appear chuffed with their St Michael’s branded prezzies. But, beneath the smiles, I rather fancy that they are really thinking "you went to the 20% sale day to do all your Christmas shopping, you skinflint."
Debenhams has just announced another three day 20%-off sale from today. M&S is thought to be doing the same tomorrow. With more price-cutting to come between now and Christmas Day, consumers are spoiled for choice by a bewildering array of bargain prices and deals.
All the price cuts make it hard to gauge how widely last week’s announced cut in the VAT rate has been passed on to customers by shops.
Some retailers have certainly cut their costs. Starbucks sells a cup of coffee for £1.70 this week, which is 5p less than last week. Earlier this week, the Daily Post found everything from Chanel No 5 to Rolex watches were down in price. At one car dealership, we found the price of a Mercedes C class saloon down from £23,350 to £22,857.
But we also found that many shops had cut their prices anyway, while some smaller retailers did nothing as they could not afford the admin involved in making what can amount to small prices adjustments.
Retail prices are becoming increasingly opaque with each year that goes by.
One retailer I came across recently was offering a free £10 gift voucher if you bought a £80 camera. The thing is, we had bought the same camera two weeks earlier for £70. In other words, the shop was making you pay for the gift voucher.
I have had my eye on a gift, on sale at Debenhams, for my mother-in-law. The price of the same item has changed four times in just a few weeks. Now, with Debenhams 20% off days, it will move in price for a fifth time. Maybe I’ll take the gift back and get my money back before repurchasing it it at the cheaper price.
Matters are further complicated by Bogoffs and three-for-two offers. In a recent expedition to M&S, I bought goods worth £55 at their full advertised price, but, with 20% off and the three-for-one offer, the bill came to just £29. A saving of £16, which is not to be sniffed at.
According to business information service Experian, heavy discounting is not boosting overall shopping numbers.
Experian tells us there was a 0.9% decline in footfall in November, with the big discount days providing temporary bursts of activity.
The experience of Woolies, which went bust last week, shows how harsh it is out there.
As for the price cutters, they may preserve market share, but at what cost to margins?
EVERY economist and his dog expects interest rates to be slashed again tomorrow.
City analysts predict a reduction of up to 1%.
Most think the big falls in the value of the pound this week will make little difference because many of our international competitors also face difficult conditions.
In Britain, we have seen very weak manufacturing figures this week, together with poor housing market data, so the Bank of England’s Monetary Policy Committee is unlikely to hold back.. In the longer term, the question is how deep will the interest rate cuts go next year. Could they really reach 1%? With inflationary dangers firmly behind us the chances are tomorrow will be another memorable day, unlike last week’s pre-Budget statement.
