Only customers can win in the store wars

Frugal shoppers tightening their purse strings in the recession are forcing big name store chains in to a price war.

The big questions are how can the stores still make a profit if brands are discounted by up to 50% and have shoppers unwittingly overpaid at the tills up to now as stores overcharged to rack up bigger profits?

This year, shoppers are seeing a big difference between enticing discounts on limited product ranges to tempt them in to the shops to spend earlier in the run up to Christmas.

Now, stores are undercutting their rivals with deeper discounts in a battle for survival.

Woolworth’s had the company’s best trading day ever yesterday as doors opened early to throngs of shoppers piled in for the huge closing down sale that could see 30,000 staff out of work by Christmas.

Woollie’s problem is they lost their place in the market because shoppers could buy everything on sale in the store for less in their supermarkets. Now the problem is reversed because Woollie’s has slashed prices, the supermarkets are following suit to keep their share of the market because a lot of their stock is now cheaper in Woollie’s.

Asda chief executive Andy Bond attacked the massive pre-Christmas discounting, in a thinly veiled swipe at store groups such as Marks and Spencer, Debenhams and Tesco.

“Lots of struggling retailers are confusing customers with 20% off this day, 50% off that day. That will stimulate sales in the short term, but that will not be the way to grow a business in the economic downturn,” he said.

Yesterday, Tesco said it would cut prices by half on 1,000 products, including Christmas food; drink, toys and gifts, this weekend.

This week, Debenhams launched its third 20% off, three-day sale in recent weeks and M&S introduced further pre-Christmas discounts yesterday, replacing its two one-day sales held over recent weeks.

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Tags: Credit Crunch, Debenhams, Marks and Spencer, Retail, Shopping, Tesco, Woolworths