Supply chain woes and mixed results from pre-Christmas sales mean some experts believe the UK could have an annual discount day: ‘retailers collectively would be better off ignoring Black Friday altogether’
Here’s only one curtain-raising louder and more persistent than a kid’s countdown to Christmas: London shops screaming about Black Friday to your inbox.
The annual claim you’ll never see a special scented candle, huge TV or nose hair trimmer at this price again — colloquially known as Black Friday — takes place on November 26.
But amid a supply crunch, and mixed results from retailers slashing prices to boost pre-Christmas sales, analysts warn that the Black Friday trend could be waning.
This tradition was embedded here relatively recently by Amazon, then rapidly repeated by British retail chains from John Lewis to Curry’s.
“Black Friday came like a whirlwind from the states to the UK and it took some time to figure it out,” says Clive Black, retail analyst at Shore Capital. “For some, this is a timely opportunity to boost sales, perhaps clear some stock or gain some profile and market share.
“For others it is a nightmare that brings forward traditionally high margin, full price sales at a discount – and also puts pressure on the supply chain, leading to an all-round decline.”
Bhavik Master, boss of British knitwear brand Paul James, agrees. His business is knocking out Black Friday this year.
“We don’t believe in heavy discounting tactics,” he explains. “We believe in pricing our knitwear right from the start, so our customers can shop when they really need to buy an item – [Black Friday] Contributes to the boom and bust that many brands experience because it is not a sustainable business model. ,
Among major retailers, M&S and Next are among those that have opted out of Black Friday sales this year.
The British Independent Retailers Association said 85% of its members would boycott the discount day this year, the highest level ever.
Buyers may also be less interested: the number of British shoppers who bought Black Friday deals last year fell 6% in 2019, according to an analysis by GlobalData.
Patrick O’Brien, UK Retail Research Director at GlobalData, predicts that supply chain problems will lead to more stores deciding not to participate this year.
“We think Black Friday this year will not be as big as it was pre-pandemic,” he says. “The stock issues that many retailers are experiencing means they have less excess stock to move, and prices are generally rising.
“However, this is still a significant event for retailers, and unless the big guns take it seriously with big discounts, smaller retailers have no choice but to get involved.
“The problem is of course that retailers would be better off collectively ignoring Black Friday altogether, as it throttles profit margins at a time when people are ready to spend, but not the competitors of the big players. The impulses make this an impossible scenario.”
Nicola Parker, director of online dental products store WithSmile, admits she feels “pressured” to indulge in Black Friday, even if it hits the bottom line.
“As a small business, we have found Black Friday to be contradictory,” she says. “We believe that customers who have made a purchase [the sale] Would have bought it at full price anyway. On average, the week before Black Friday, our sales drop by about 50% as customers wait for savings.
“But if we don’t offer Black Friday sales, we may miss out on trading other companies that are offering one. It becomes a bidding war to see who can offer the cheapest product. Is. “
However, it’s not just about what’s going on. Some SMEs see Black Friday as an important tool to gain customer data and loyalty.
“Black Friday is an important time of year for customer acquisition,” says Oliver Manell, founder and CEO of luxury candle retailer Neom, which saw discount day sales more than double last year compared to 2019.
“For us, it’s about introducing new customers to our brand and encouraging them to continue shopping with us over Christmas and the weeks after.”
This can come at a heavy cost. Carolina Paradas-Mandato, Head of Strategic Partnerships at loyalty app Swappy, says: “Black Friday is an extremely expensive marketing strategy, regardless of the huge amount of traffic and customer intent. Retailers may find themselves sacrificing profit margins And can see the damage instead.
“It’s a volume game for most, so for SMEs, it’s a risky time to jump on the bandwagon. Plus it’s hard to participate in these campaigns just once. Customers become addicted to discounts.”
As we move into mid-November, the average online shopper’s inbox will still scream ‘Black Friday’ more frequently than self-check out with an unexpected item in the bagging area. But as SMEs and large chains alike continue to expand their influence, this phenomenon could be on its way.
“Calling the end of Black Friday may be a little premature, but we are at its peak – and most homes, businesses and the environment are better for it,” Black claims. “Many shoppers have thought that, more often than not, Black Friday was a manipulation that sold them goods, often so, that they did not want and therefore did not represent good value.
“For SMEs, Black Friday can help their financial performance, but only if it is aligned with the genuine interests of the shopkeeper and the business. It hasn’t done a good job of fast in recent years.”