Adidas is weaning itself off discounting

After a year weighed down by discounting, Adidas has begun the process of weaning itself off the addictive substance. 

The decision comes after the company reported its first annual loss in more than three decades, with a net loss from continuing operations of £50m, while net sales on a currency neutral basis were flat year-on-year. 

Whilst CEO Bjorn Gulden had warned of a bumpy year for the brand in May 2023, the results are still something of a shock to the system given how dependable Adidas has been for so long.

The reason for this loss, according to Gulden is the addictiveness of discounting, the appeal of such a tactic has, according to Gulden, eaten into Adidas’ gross margins at the beginning of the year. However, the company had realised that discounting was doing more harm than good and had started to cut levels of discounting by the end of the quarter. 

As proof that the company is weaning itself off discounting, Gulden has pointed to the innovations and “brand heat” that the company is focusing on. One example he was particularly proud of was the casual “terrace” style trainer market, where Adidas’ ranges like Gazelle and Samba have proven popular in the past year.

Furthermore, the company, according to Gulden intends to be present in all sports including smaller sports, and will be increasing its marketing spend this year with the Euros and Olympics on the horizon, in order to continue building brand heat.