Retailers' pre-Christmas discounting has reached record levels and even deeper reductions are expected as store groups desperately clear stock.

Discounting so far has averaged 37 per cent of full selling price, research by Ernst & Young revealed – up from 34.6 per cent last year and 33.6 per cent in 2006.

Alongside a wide variety of traditional promotional techniques such as multibuys, offers specific to the time of day have been deployed by retailers for the first time.

Since the second week of December, there has been a shift towards straightforward markdowns, often covering entire departments in contrast to last year when discounts were typically limited to particular categories and product lines.

Ernst & Young retail director Jason Gordon said the extent of price-cutting was “unprecedented” but that discounting was inevitable.
He said: “A near total collapse in consumer confidence driven by falling house prices, surging unemployment and the dismal economic outlook has left shoppers with little festive cheer in the run-up to Christmas.

“It’s no surprise that many retailers have had to offer record levels of discounts and promotions.”

Ernst & Young expects the retail sector to suffer a two per cent like-for-like sales fall over the Christmas period.

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