Retailers and their finance chiefs are facing a challenge balancing consumer expectations for discounts and the need to keep raising prices to offset high inflation.
With more discounts available and additional inventory being sold through off-price retailers, consumers are expecting to find good deals when they go shopping, executives said.
Last month, the average discount at such retailers was 16%, up from 15% a year earlier, UBS said.
That is prompting competitors—including those that don’t have too much inventory—to fine-tune their pricing strategies, offering discounts to stay competitive even as they grapple with higher costs.
The company’s operating margin fell to 15% from 18.1% a year earlier, according to FactSet, a data provider.