Stores in Canada are gearing up for Boxing Day sales, with many rolling out deals early in the hopes of enticing budget-conscious shoppers.
The Canadian promotional retail event has been overshadowed in recent years by its American counterpart, Black Friday.
But experts say Black Friday and Cyber Monday sales late last month fell short of expectations, leaving some stores with inventory to clear before the end of the season.
Retail analyst Bruce Winder says stores will try to balance the need to sell surplus stock with maintaining their margins.
He says the bigger the discount the more volume of goods a store is likely to sell, whereas a smaller discount keeps margins higher but runs the risk of stores carrying excess merchandise that needs to be packed away.
Winder says this can increase labour costs and is a drain on working capital.
Yet Retail Council of Canada national spokeswoman Michelle Wasylyshen says most retailers are not overly concerned with inventory levels _ at least to the degree some analysts suggest.
She says the message that stores have too much stock may be partly to blame for lacklustre Black Friday and Cyber Monday sales, which she called “uneven at best.”
“The general feeling is that consumers were waiting for better deals, either because they have heard in the media that retailers have too much inventory, or because they have had to tighten their belts from the higher costs of living,” Wasylyshen said.
Stores are heading into Boxing Day and the end of the year with “cautious optimism,” she said.
“The Boxing Day event is a welcomed opportunity for retailers to pre-plan promotional events and look at their inventory levels to see if in-store or online sales events are required to help eliminate excess inventory,” Wasylyshen said.
Much like Black Friday, she added that Boxing Day has become a week-long event, with fewer of the in-person doorcrasher sales that once epitomized the sales day.
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