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Market research professor: Continual shop markdowns reveal panic

Ahead of the post-Christmas sales frenzy, many shops have already started discounting products. According to Turku School of Economics professor Heli Marjanen, the continual sales and special offers mode in the Finnish retail sector reveals the plight of the trade.

According to one expert, continual sales and special offers reflect the retail trade's panic. Image: Kalle Mäkelä / Yle

Soon no one will want to pay full price for anything, according to Turku School of Economics professor Heli Marjanen, who heads the master's programme in retailing and services at the university. 

She maintains that endless discounts are confusing for consumers and the so-called normal price of a product becomes unclear.

“This year’s phenomenon of special discount campaigns started in November and has continued to this day with ongoing offers of minus 20 percent plus extra discounts,” she says.

At the Kauppakeskus Mylly shopping centre in Raisio, near Turku, Marjanen's vision is not shared.   

“There’s no reason for panic, business is going well," says the shopping centre's Managing Director Pertti Vikkula. "Our expectations for this Christmas season are high and we believe we'll reach last year’s targets or at least come close to them,” says Vikkula.

According to the Finnish Commerce Federation, Christmas sales this year will be 1.5 percent less than last year. They predict that next year will also see a shortfall in profits by the retail trade. Federation Director Juhani Pekkala says the decrease is exceptional; the last time Christmas sales were this low was during the previous recession of the 1990s.

Sales can't be endless

According to Professor Marjanen, lower prices are a fast and easy way to get consumers shopping. And there's easily a chain reaction: when one store discounts, another starts to do the same. The consumer, in turn, starts to wonder how much lower prices will drop.

“If something is being sold for a discount, how much cheaper will the products be when the official sales start?” she asks.

According to the Finnish Competition and Consumer Authority, sale prices must be real and discounting cannot continue indefinitely. Sales are allowed to continue at one stretch for no more than two months and within in a calendar year, three months in total.

Nordea Bank estimates that Finns will spend an average of 311 euros on Christmas gifts this year.

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