Photo: Alex Fradkin

Retailers Rejoice: Shoppers’ Addiction to Sales Is Finally Fading

Sep 16, 2017

Price-chopping is so last season. The most recent corporate earnings season brought reassuring signs for retailers that they are finally starting to pushing back at the brand-destroying, margin-sapping discounting addiction among shoppers that they have helped create for years.

Ralph Lauren said its merchandise profit margin rose 2.1 percentage points last quarter, thanks to less discounting and better inventory planning which led to less clearance selling. And Coach reported that in its most recent quarter, 45% of sales came from handbags priced $400 or more, up from 40% a year earlier, a result partially achieved by getting out of many department stores that are full of sales signage. Even discount chain Target said it's getting customers to pay more for many items.

Still, no retailer should cry victory over discounting: off price retailers T.J. Maxx, Marshalls and Ross Stores reported some of the best results in the industry last quarter. Some shopping habits are too hard to break.

A version of this article appears in the Sept. 15, 2017 issue of Fortune.

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