Retailers has slashed Christmas stockholdings to avoid the deep discounting of previous years when a combination of over ordering and depressed consumer spending left too much surplus stock on the shelves and they had to slash prices to shift it, according to KPMG’s retail head David McCorquodale.
This will be the most under stocked Christmas in recent years, he said, warning that it could mean less extensive sale racks at the more successful shops, and a shortage of sizes in the more popular fashion ranges.
McCorquodale said: “Retailers in the fashion world tell me they are carrying three to four per cent less stock in comparison to this time last year. This might sounds like a small percentage, but this reduction will save these retailers millions in wasted margin.”
This was the result of the fact that merchandising departments, working in association with those responsible for targeted promotions, have been given a greater influence than buying departments to manage stock levels and margins.
“This improved management of stock means the most successful retailers on the high street won’t need to discount as extensively or as deeply this year, so it’s likely shoppers will only find real bargains at the less successful players, whose ranges aren’t as good or who have over ordered.”
McCorquodale also pointed out that the dwindling availability of credit insurance has seen retailers finance the purchase of stock themselves, which has increased pressure to hold as little stock as possible. It has also had an impact on the relationship between supplier and retailer as they work together to manage supply lines.