Sales have already taken a hit in anticipation of Black Friday discounting, but the full extent of its impact remains to be seen.
Halfway into the golden quarter, all the talk is typically of the run-up to Christmas. Retailers began in earnest over the last week to stoke up the seasonal feel-good factor as the glitter-storm of festive advertising got under way.
But between now and Christmas one date looms large in the trading calendar: Black Friday. And it remains unclear whether the promotion will be a force for good or ill.
Black Friday may be lining up to go on record as one the biggest shopping days ever as the tills ring up sales of £1bn or more.
But if consumers splash out, then to what extent will they subsequently shut their purses, Christmas shopping done bar the turkey and last-minute items?
That’s the question many in retail are asking, and nobody really knows the answer.
Seasonal disruptor
The latest monthly BRC data, for October, showed a lacklustre performance. Like-for-like sales edged down 0.2% over the month and total growth was below the three- and 12-month averages.
“But if consumers splash out, then to what extent will they subsequently shut their purses, Christmas shopping done bar the turkey and last-minute items?”
George MacDonald
The implication was that shoppers were already holding off purchases in the expectation of bargains. Typical Black Friday product categories such as small domestic appliances were “depressed” in anticipation of deals.
Add to the apparently pent-up demand the general hysteria, which in a few short years has become as traditional an accompaniment to Black Friday as cranberry sauce to the Christmas bird, and the promotion may wreak havoc with retailers’ margins and their planning for the festive period.
Although many retailers buy products specially for Black Friday, others will reluctantly be dragged into the discounting frenzy simply because it is demanded by shoppers trained to expect Sales ahead of Christmas.
It may bring some opportunity however. Mild autumn weather means that sales of winter clothing have been slow for some. The BRC cited retailers’ reports that “mid-season Sales were longer and promotions deeper than last year, with a negative effect on margins”.
Black Friday might allow those retailers to clear stock if necessary, if not at full margin then perhaps a better one that might otherwise be achieved.
But come January and the torrent of trading statements, the focus is likely to be on margin as much as the top line.
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