U.S. retailers throw down prices for pick-up of holiday deals

U.S. retailers throw down prices for pick-up of Holiday deals

WSJ, the Wall Street Journal’s Heard on the Street is monitoring a basket of five items at four retailers— Macy’s, J.C. Penney, Ralph Lauren and Gap—for a month or so to try to get a sense of whether the low inventory the companies have touted is helping them avoid discounting. We visited the stores for a second time on Tuesday, December 6. With high-end Polo Ralph Lauren being the notable exception, the vast majority of items were selling for less this week than last.

Macy’s was in the midst of a “friends and family” sale, during which most items in the store were 30% off. For the Michael Kors “Selma” satchel, which was already marked down to 20 % off, the sale meant a total discount of 50 % off – a USD 398 bag for only USD 199. The Calvin Klein shirt and Tommy Hilfiger pants we chose were also 30 % off. The Fossil smartwatch wasn’t part of the storewide sale, but it was selling for a lower price than last week, marked down 25 % to USD 221.25. Only the Burberry scarf, sold in that brand’s boutique within the department store, was selling at full price.

Table 1

At Penney, almost everything was still the same price as last week. That suggests the retailer’s strategy may have been to make everything look like it was marked down from the start in an effort to appeal to its more price-conscious consumers. But we had a secret weapon: a Penney coupon, which we were handed when we left the store a week earlier. Coupon holders could get an extra 25 % or more off most items from Dec. 1-6 both in stores, and online.

At Ralph Lauren, only the rib-knit scarf was marked down to USD 54.99. The item’s original selling price of USD 78 suggested it was already priced to be a less expensive gift item. Once again, the bigger concern for the brand may have been the many items selling at Macy’s for 30 % off. Ralph Lauren is trying to limit the amount of merchandise it sells to department stores to protect its brand.

Finally, there is Gap where all men’s and women’s clothing was selling for 40 % off. Accessories were excluded, but the scarf we had been following was on sale for USD 15 – down 50 % from last week, tying for the biggest relative price decline. The USD 49.95 utility tote was the only thing selling at full price and the only item not selling for less than last week.

When it comes to discounting, no one is immune. But the relative lack of price movement at Ralph Lauren and Penney so far suggests the high and low ends may be safer places to be.

www.wsj.com


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