Black Friday may lose its sparkle as football and inflation hit online sales
Black Friday may lose its sparkle as football and inflation hit online sales
The discount ‘day’ has taken place mostly virtually for years, but the days of crazed clicking could well be over
The words Black Friday used to conjure images of frenzied shoppers racing to shops and online stores to nab as many bargains as possible. This year it is likely to be a more muted affair, with spending on non-essentials expected to fall amid cost of living pressures and the distractions of the men’s football World Cup.
It’s forecast that Britons will spend GBP22.62bn over the two-week Black Friday period, which runs from 22 November until 5 December. That is a 2.1% increase year on year, but once inflation has been taken into account it actually means they will be putting fewer items into their baskets, according to research by GlobalData for Vouchercodes.
This is a marked slowdown for the US-inspired discount day, which has gradually become an online event. There have been few queues outside shops in the UK since early exuberance led to scuffles in some stores in 2014.
A Black Friday damp squib could pile pressure on retailers, which may have hoped the event could generate excitement and tempt shoppers searching for ways to trim their Christmas celebration spending. Poor sales will only add to the annual game of chicken where shoppers hold off in hopes of getting better deals close to Christmas as retailers become more desperate to clear stock.
Buzz around the event will also be hit by football fever.
On the evening of Black Friday itself, rather than going shopping, large numbers of people will be tuning into England’s second match, against the US, dealing a blow to valuable evening sales.
Some people may turn back to retail over the following days, however, and the trend away from nights out, noted by many supermarkets and hospitality businesses, could mean bored householders have more time to search online for good deals.
However, increasing scepticism about the bargains on offer is likely to mean the days of crazed clicking may be over. Consumer group Which? continues to warn that “most of the advertised ‘deals’ should be taken with a pinch of salt”.
Technology, traditionally a Black Friday winner, will also be less sought-after this year, because many families splashed out on bigger TVs, laptops and gaming consoles for entertainment and work purposes while stuck at home during the pandemic lockdowns.
A switch back to physical shopping following two years of high street lockdowns may also put a dampener on the mostly online event. Many retailers’ launched their Black Friday discounts early, which suggests they have stock to clear after disappointing initial sales.
A period of relatively warm autumn weather has only added to the pain for clothing retailers.
Pricey winter coats and knitwear, which traditionally put a rocket under fashion sales at this time of year, are proving less attractive in the kind of balmy temperatures that large parts of the UK have enjoyed over the past two months. Online retailers are expecting Black Friday sales to fall for the second year in a row – by 5% according to trade body IMRG and analysts at Capgemini, with clothing suffering the biggest declines.
Concerns about deliveries, with strikes on the cards by Royal Mail lasting right until Christmas Eve, may persuade many that a trip into town is a safer bet. Many of those with less to spend are also switching to cash rather than cards to keep control of their budgets, and this makes high street shops a more attractive option.
The decline is likely to put more pressure on digital businesses already struggling with falling demand and rising costs – particularly on handling deliveries and returns as fuel, energy and labour costs soar.
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“It’s well documented that things are very tough at the moment.
If the situation deteriorates further, it really will be cause for alarm,” says Andy Mulcahy, strategy and insight director at IMRG.
With a number of businesses already on the brink, fears of a poor end to the year – when the majority of retailers make their profits – could lead already nervous lenders and suppliers to call in their debts, casting a pall over the sector for the supposedly festive season.
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