business news in context, analysis with attitude

Marketplace, on National Public Radio (NPR), reports that "retailers have increasingly been using discounts and promotions like this to encourage shoppers to keep spending, pointed out Sonia Lapinsky, a retail analyst with AlixPartners … Retailers who cater to middle- and low-income shoppers are especially leaning on discounts since inflation is hitting those consumers hardest, Lapinsky added.

"That includes stores known for their discounts, like Walmart, that may have additional reasons for slashing prices, said Mintel retail analyst Diana Smith."

However, Smith tells Marketplace that "too many discounts can be bad for business. They can hurt a store’s image long-term, and 'it does eat into bottom-line profits,' she said. 'Retailers are already challenged right now because they’re having to deal with the higher costs as well'."

KC's View:

Retailers have to be careful not to fall into the Bed Bath & Beyond trap - if all you attract is cherry pickers addicted to coupons and promotions, and not the cherry buyers who feel a tangible connection to a retail offering, then the model becomes less and less sustainable.