Williams-Sonoma says rivals who lean into discounts are training shoppers to 'wait for that promotion'
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- Some retailers are offering discounts and sales to win over inflation-weary shoppers.
- Kitchen and home retailer Williams-Sonoma is taking the opposite approach, its CEO said Wednesday.
- Discounts encourage shoppers to put off purchases, Laura Alber said.
Many retailers are trying to lure in budget-conscious shoppers with discounts and other markdowns. Not Williams-Sonoma.
The kitchen supply and home furnishings chain has actually been offering fewer discounts over the last several years, CEO Laura Alber said Wednesday on the company's earnings call.
Moving away from sales eliminates a reason for shoppers to put off buying something they like, she said. As shoppers look for discounts these days, some might delay purchases in hopes that they will be able to snag a discount later on.
Under Williams-Sonoma's strategy, "the customer doesn't have to wait to see if they're going to have a better price on that sofa in two weeks," Alber said. "They know the price is the price."
Instead, Alber said that Williams-Sonoma has focused on getting shoppers to come back by offering consistent prices and quality items. "We think we are very, very competitively priced all-in versus anyone with the same level of design and quality, which allows us to be less promotional," she said.
Sales can be attractive ways for retailers to create a temporary bump in revenue, Alber told CNBC's Jim Cramer after the company's earnings report.
"That's all good for the short-term, but then you get customers trained to wait for that promotion, which is never a good thing because you're really competing with yourself," she said.
Williams-Sonoma beat expectations for its third-quarter earnings and raised its guidance on Wednesday. Its shares closed 28% higher after the report, reaching an all-time high.
Many shoppers are focusing more on finding good deals after dealing with years of higher prices and depleting savings that they built up during the pandemic.
In response, brands from Walmart to McDonald's have lowered prices — sometimes temporarily, other times permanently — to keep customers visiting.
Williams-Sonoma carries products at various price points, from kitchen utensils sold under its store brand to Le Creuset enameled cookware. Alber said on the company's earnings call that it wants to offer "approachable prices with great quality."
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