New data from Bain and Company explores October retail sales data and the pricing strategies retailers are deploying over the coming weeks. Despite early signs of healthy shopping and a comeback from September’s slump, several retailers held October sales events to jump-start the season. Bain expectations have remained the same with total nominal US retail sales for Bain-defined categories growing just 3.3% year-over-year in October, compared to 6.9% last year.
Many retailers are turning to broader and deeper promotions to increase traffic and volumes this season in response to these trends as well as mixed signals from consumers. These promotional strategies—a continuation from last year—are expected to further increase though the end of 2023.
Amid pricing volatility, consumers and retailers alike have faced the challenges of higher sticker prices and domestic producers’ selling prices. Now, inflation-weary consumers are slowing their spending. But as shoppers pull back and the rate of price increases slows, retailers’ margins are getting squeezed.
“Given a highly promotional holiday season, retailers will need to be creative and brand values aligned with their seasonal promotions, making sure to build in opportunities to tweak strategy as real-time results and competitor actions come in,” said Aaron Cheris, head of Bain & Company’s Americas Retail practice. “Leading retailers are not only applying the right pricing model to the right items in ways that are consistent with their brand value proposition, but will continue to adapt, adjust, and reevaluate throughout and after the holiday season.”