Discount-fever will squeeze Christmas margins, even as spending rises, The Economist Intelligence Unit reports

As sales become more global and intense, we are seeing the potential for a continuous discounting period from November right into January according to “The Never Ending Sales Period” a new report from The Economist Intelligence Unit. The report warns that not only will discounting hit retailer profit margins but it will also cause sales fatigue among consumers.

Jon Copestake, retail and consumer goods analyst at The Economist Intelligence Unit said: “Faced with a rash of sales dates right through from Black Friday in November to Manic Monday in the week leading up to Christmas, sales dates are becoming indistinct and blurring into a continuous period of discounting. This means that consumers are becoming desensitised to sales and are beginning to expect discounts as the norm rather than the exception.”

According to the report, future years could see the sales period extending even further as shopping dates like the Chinese Singles Day on November 11th become more globally recognised. This year Black Friday sales began up to a week before the event itself in some stores and online channels. With Halloween sales also rising the pressure to shop could literally create a nightmare before Christmas.

With price sensitivity still firmly established many years after the Economic Crisis of 2008-9 the twin challenges of online and discounter competition has forced retailers to take on more radical measures to win over consumers. Although last year saw chaotic scenes in stores on Black Friday, a more muted response this year highlights that the lengthening of the sales period and rising m-commerce take-up is enabling shoppers to buy whatever, wherever and whenever they want.

When retailers brought forward Boxing Day sales in 2009 it was perceived as a temporary measure to drum up footfall, but this has now come to be expected as normal from many shoppers who have grown accustomed to discounts such as the daily flash deals run by Amazon.

In response retailers will need to revisit their strategies, adding caveats to discounts or opting out of some sales altogether, as Asda did with Black Friday. Consumers may need to be careful too. More opaque pricing and a sustained period of conspicuous consumption lasting nearly three months is likely to mean that many shoppers still end up overspending by stocking up on items that they may not need. Data from the Money Advice Trust suggests that a quarter of UK shoppers already feel pressured to overspend this Christmas with 35% of shoppers borrowing to cover spending.