Ron Friedman, national leader of Marcum's Retail & Consumer Products practice, was quoted in a CNBC article discussing how retailers who continually discount will suffer in 2016.
By Krystina Gustafson
The National Retail Federation said Friday that holiday sales increased 3 percent to $626.1 billion in November and December, falling short of the trade group’s forecast for 3.7 percent growth, as unseasonably warm weather and low prices weighed on results.
The news came shortly after the Commerce Department said retail sales posted an unexpected drop in December, falling 0.1 percent from the previous month. Compared with the prior year, December sales rose 2.2 percent, to $448.1 billion, according to the government data.
Marcum’s Ron Friedman said the retailers who routinely offered 50 to 70 percent off will suffer. He did, however, predict some of these companies will nonetheless manage to eke out a profit, as a result of cost savings.
“It’s nothing to see 70 percent discounts, which means the stores are selling [the product] for less than cost,” he said. “They’re just turning over inventory to create cash flow.”