Credit: 松林 L/Wikimedia

Retailers can't afford to ignore Black Friday

Visa Europe reckons shoppers will spend £1.9bn on the 'consumer holiday' this year.

by Jack Torrance
Last Updated: 08 Dec 2015

Black Friday is nearly here, but some retailers look set to give the annual 'consumer holiday’ a frosty reception this year. The ‘tradition’, which originated in the US, really took off in blighty last year as legions of shoppers stormed the nation’s supermarkets to brawl over cut-price TVs, games consoles and other assorted nick-nacks. It seems Britain’s consumers are no less determined this year.

Visa Europe estimates that shoppers are planning to spend around £1.9bn this Friday, including £1.19bn in bricks and mortar stores. That second figure is up 4% on last year and 20% on 2013. They’re also expected to spend £629m online on ‘Cyber Monday’ in the following week. Plenty of retailers will be gearing up to grab a piece of that action (not least Amazon, which has already started offering ‘lightning deals’), but others are taking a stand against the practice.

Earlier this month Asda said it would be shunning a day of big discounts in favour of ‘sustained savings spread across a traditional seasonal shop’. The fashion chain Fat Face will be donating 10% of its profits to charity instead of lowering prices (‘Cynical discounting is not a sustainable model for UK retail,’ its chief exec Anthony Thompson told the Guardian earlier this year).

It’s not hard to see why some are pushing back against this year’s discount push. The throngs of shoppers stripping the shelves of Asda last year made for easy PR, but perhaps not for the right reasons. And the ‘fire sale’ atmosphere isn’t great for profit margins either.

Shops used to be able to charge a premium in the run-up to Christmas before dropping prices on Boxing Day to get rid of all their excess stock. By participating in Black Friday they are slashing their prices early and potentially missing out on profits they would have previously made in the run-up to Christmas.

This isn’t the first time retailers have made negative noises about Black Friday. Despite making a pretty good go of things last year, John Lewis boss Andy Street said that the practice weighed on profitability and put pressure on companies’ logistics. ‘My personal hope is that this is the high water mark for Black Friday,’ he told the BBC.

This year his company’s Black Friday website says, ‘At John Lewis our commitment to being Never Knowingly Undersold means that we match our competitors' prices all year round – so on this day, we'll have even more deals to enjoy.’ So John Lewis is still taking part, even if it is dragging its heels.

Asda’s stand is bold and could help keep its profits firm as it digs in for an important winter of trading. But it seems Black Friday is here to stay and, however reluctant they are to participate, retailers  will need to find innovative ways to cope. It is a beast of their own making, after all.

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