Everlasting bargain sales tend to obscure prices as stores push for Christmas boost

Retailers send loyal customers reward vouchers in hopes they will spend more

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For those consumers who are hankering after reduced prices, December has been a never-ending festival.
      Just like last year, the major department store chains, including Sokos, Stockmann, and Anttila, have all showered their loyal customers with extra discount vouchers in addition to the customary monthly offerings.
      The reductions have been around 20 per cent at best.
      In addition, many other smaller or bigger stores have been offering various benefits and reductions, even though the actual bargain sales have not begun yet.
     
The goal of offering advance discounts is to prevent a recession Christmas.
      The purpose of the vouchers is to tempt customers to spend money already before Christmas, instead of waiting for the actual bargain sales to begin after Christmas.
      The more people buy prior to Christmas, the less merchandise retailers will have to sell at huge discounts later and the more profit they will make.
      If the retail chains are to be believed, consumers have taken the bait.
      ”Christmas sales have started up quite nicely, but the crucial days are yet to come”, says Maisa Romanainen, the Executive Vice President of the Stockmann Deparment Store Division.
     
The Consumer Agency advises consumers to be careful with their money in the bargain-coupon hysteria.
      ”We advise that one should not pay too much attention to the reduction percentages. Even though the price of a product has been reduced, the price may still be higher than in another store next door”, says Consumer Agency lawyer Mika Hakamäki.
      Hakamäki points out further that the purpose of such vouchers is to lure a customer into the store. Once the customer is inside, he or she is likely to buy other items than just the one that was planned.
     
In the current Christmas season, the competition for customers can be seen particularly in those cities where both Stockmann and Sokos have a department store.
      Already last Christmas, Stockmann offered its customers a number of 10€ vouchers that could be used to get a discount after their purchases amounted to a specified sum. Effectively the discount was 10 or 20%.
      This year, Sokos sent similar vouchers to its loyal customers in good time before Stockmann. However, such vouchers were distributed only in the cities with both Sokos and Stockmann outlets.
      Neither Sokos nor Stockmann was willing to reveal how big the impact of these vouchers is on Christmas sales. However, both department stores admit that ”they are satisfied”.
     
Everlasting discounts have been noticed in the consumer prices all year round.
      On Monday, Statistics Finland reported that in November the consumer prices nevertheless declined only by 0.9 per cent compared with the corresponding period in 2008.
      The reason for the reduction in the general level of prices or deflation was chiefly the fact that the interest rate on loans declined.
      Moreover, food, telephone charges, and housing all became cheaper compared with last year.


Previously in HS International Edition:
  Shopping the good shop against the threat of recession (27.11.2007)

Links:
  Consumer Agency
  Statistics Finland

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