The survey results, drawn from the responses of 1200 businesses, showed 38 per cent of companies were positioned to discount heavily into the holidays. Photo: Louise Kennerley
Heavy price discounting, the new norm in the traditional retail industry, is expected to increase into the holiday season, according to a survey of companies.
Nearly four in 10 business owners and executives said they expected to lift their inventories in the December quarter, compared with the same time last year, according to Dun & Bradstreet.
Yet selling price expectations have dropped more than 10 points over the past two years to hit a quarterly index reading of 11 points.
''Five years ago, discounting was a seasonal tactic that was primarily limited to post-Christmas and end-of-financial-year periods,'' D&B's Gareth Jones said. ''However, discounting is now the norm as consumers have become accustomed to sales and are unwilling to buy at full price,'' he said.
Traditional retailers have battled to curb their reliance on discounting to woo shoppers in the door amid vicious competition from overseas outlets made more enticing by the strong dollar.
The relentless price discounting has helped usher in 40 per cent drops in annual profit at department store David Jones and electronics retailer Harvey Norman, leaving the industry asking what, if anything, will halt the downturn.
In June, when companies foresaw selling prices at an index level of 17 points, the actual selling prices came in at three points, the lowest level since the June quarter in 1997, the D&B report showed.
The survey results, drawn from the responses of 1200 businesses, showed 38 per cent of companies were positioned to discount heavily into the holidays.
The survey's inventories index reached 24 points - 22 points above the 10-year average.