Credit: Alan Cleaver/Flickr

Do Black Friday discounts really work?

John Lewis announces a double-digit drop in its weekly sales following record revenues on the discount day.

by Rebecca Smith
Last Updated: 08 Jan 2016

As the frenzy of Black Friday descended on Britain, analysts speculated whether this would mean traditional Boxing Day sales got usurped altogether. Shoppers spent a record £1.1bn at UK online retailers on the day and John Lewis was one of the big winners. It disclosed record sales – up 4.8% year-on-year and 60% week-on-week to a total of £187.7m for the week of Black Friday. But do these discount days provide a boost longer-term or do they just concentrate sales into pointlessly intense bursts?

The unique weekly sales reports from John Lewis are illuminating. The partnership revealed that the week after Black Friday had a double-digit drop in sales, falling 11.8% to £165.6m from the week before – though it’s still up 13.6% on the equivalent period last year.

The retailer mentioned a boost stemming from lagging Black Friday shoppers, but also its ‘never knowingly undersold’ promise, a commitment to match both prices and services. It's interesting to consider which had the bigger impact in driving sales. It's likely to be a combination of the two, plus its consistency when it comes to online retail. Customers presumably feel confident that John Lewis will deliver even during its busiest periods.

This year’s Black Friday was notable for the fact that numerous supermarkets scrambled to emphasise they weren’t taking part in the day. Asda opted out, saying shoppers were simply fed up with quick sales, which might have some truth to it.

New data has also showed that UK retail sales grew at the weakest pace for any November since 2011, extinguishing any hopes of an industry-wide boost from Black Friday discounts.

While Sainsbury’s claimed it had sold two and a half times the value of Black Friday goods that it did last year, it turned out it didn't need the extra staff and queuing systems brought in to protect deal-frenzied customers.

It's possible though that the increasingly frenetic nature of promotional days actually puts customers off in the long-run. It certainly seems a tricky concept to sustain year-on-year – to appeal to enough customers to rake in bumper sales, but not deliver such a stressful experience they’re put off from venturing out on future discount days.

The juggernauts that are Aldi and Lidl have no such problem. The former gleefully tweeted as Black Friday loomed: ‘We don’t do #BlackFriday. Every day is a Black Friday at Aldi.’ Which in a way is difficult to argue with.

Customers have been flocking to the 'discount' supermarkets for their consistently low pricing (they don't actually do in store discounts). The German firms' business models offer good products at low prices, but also increasingly taps into ‘middle-class’ demand by offering more high-end products at still competitive prices, which seems to have paid off too.

The not-so subtle dig from Aldi that, ‘We don’t wait for one special day of the year to give customers the best prices’ raises the question of what works most effectively. The fact Aldi and Lidl now control a tenth of British grocery sales – double their share three years ago – may give an indication of what the current answer is.  

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Leading from a distance: Remote working for the C-suite

Leadership lessons video panel: Chris Hirst, CEO of Havas Creative; Matt Peers, COO of Linklaters;...

There’s little point saving your business if you let your market die

Opinion: The nature of the coronavirus pandemic demands we look out for each other.

C-suite and furloughed

Use this as an opportunity to take a breath and get some perspective, says this...

Books for CEOs: Daniel Goleman, Jack Welch, Nelson Mandela

Beaverbrooks CEO Anna Blackburn shares her reading list.

What happens next: COVID-19 lessons from Italian CEOs

Part I: Marco Alvera, chief executive of €15bn Lombardy-based energy firm Snam, on living with...

Coronavirus communications: Dos and don'ts

Uncertainty and isolation make it more important than ever to be seen, to be heard...