Bargain hunters have their credit cards ready. The holiday season kicks off this week with Black Friday - one of the biggest shopping days of the year.
'You have to join in with Black Friday but it’s not a trend I particularly enjoy,’ admits Ted Baker founder Ray Kelvin. ‘The Americans brought us over Halloween in a big way and now we have Black Friday – I think the second one is scarier!’
Are retailers right to be fearful? Here's what we can expect from Black Friday:
Despite tightened household budgets, Britons are expected to set another retail record on Black Friday by spending an estimated £2.6bn - or £1.8m per minute - according to forecasts by VoucherCodes and the Centre for Retail Research (CRR). That's an 8% increase on the £2.4bn spent last year.
The biggest Black Friday winners will be online retailers. Online spending alone is expected to reach £1.15bn, up 15% on 2016. Traditional high-street stores are feeling the squeeze: John Lewis, Next and New Look have all reported poor figures for October, but the most significant sea change over the weekend was Asos overtaking Marks & Spencer in shareholder value. The online retailer posted a 2% boost in shares, putting its market value at £4.89bn - topping Marks & Spencer’s market valuation of £4.88bn. The old retailing stalwarts need to watch their backs: for every £5 spent by consumers in November/December, £2 will be spent online.
Argos, which posted its biggest ever day of sales on Black Friday last year, joins several other retailers including Currys and Amazon by already starting to run Black Friday offers. The term ‘Black Fiveday’ was coined by consultancy firm Salmon last year to describe the extension to the typical Black Friday rush, with retailers aiming to capitalise on this peak sales period to recover from poor autumn trade. ‘The burning questions for retailers will be whether shoppers are holding off their purchases until Black Friday, and whether retailers can recover from this month’s poor performance to end the year on a high,’ said Paul Martin, head of retail at KPMG.
Consumer group Which? claims that Black Friday deals are not all they seem: six in ten products offered in Black Friday deals in 2016 were actually cheaper at other points in the year. Smart shoppers will be doing their research before rushing to buy for Black Friday, so the pressure will be on retailers to deliver decent deals. Price comparison sites, voucher codes and data will all play into the narrative of this year’s Black Friday as consumers become savvier at finding the best possible bargains. ‘Black Friday is no longer just a day of bumper bargain deals, as an increasing number of shoppers are wising up to the phenomenal deals over the course of the weekend, from Black Friday through to Cyber Monday – with plenty of opportunity to secure a must-have item for less,’ says Paul Lewis, senior marketing director at VoucherCodes.
Despite a bumper Black Friday, British shoppers look set to spend less on Christmas for the first time since 2012, as a fall in real wages and continuing economic uncertainty put a brake on celebrations. ‘While it still looks likely that consumers will be hitting stores and websites in search of bargains this Black Friday and Cyber Monday, we expect spending for the duration of the festive season to be lower in comparison to last year,’ says Mark Antipof, chief commercial officer at Visa. ‘Looking back, consumers were in a sweet spot in 2016 – low inflation and rising wages meant there was a little extra in household budgets to spend on the festive period. 2017 has seen a reversal of fortunes – with inflation outpacing wage growth and the recent interest rate rise leaving shoppers with less money in their pockets.’
Here’s to finding a steal this weekend, then.