Debenhams profit warning

Debenhams has issued a profit warning after their poor Christmas sales.

Pini Yakuel, CEO of Optimove, comments: “Against competition from online shopping, retailers are facing significant pressure to discount heavily before and after Christmas.

“But heavy discounting risks hurting long-term profits, as Debenhams has experienced first-hand. Shoppers drawn in by heavy discounts during the Christmas season are 19 per cent less likely to return again than those who buy at another time – and return custom is where retailers seek to make back the heavy costs of attraction and discounting.

“Discounting needs to be seen as part of a more personalised strategy to build relationships with customers, rather than a one-size-fits-all approach to reducing prices for all customers on almost all ranges.”