Cost of living crisis casts shadow over UK Black Friday

Cost of living crisis casts shadow over UK Black Friday

LONDON: British retailers are hoping Black Friday’s discount day will entice shoppers to spend, although it comes amid a deepening cost of living crisis and World Cup distraction from soccer.
Britons will spend 8.7 billion pounds ($10.5 billion) over the Black Friday weekend (November 25 to November 28), according to research by GlobalData for VoucherCodes – a rise of 0.8% in year-on-year which masks a sharp decline in volumes once inflation is taken into account.
Consumers have cut spending as soaring inflation – which hit a 41-year high of 11.1% in October – eats away at disposable incomes. And they started Christmas shopping earlier this year to help budget their finances.
This year, consumers will use Black Friday, which has become more of an online event, much more to jump on unsolicited deals and for Christmas gifts, rather than larger, delayed purchases, consultants say. McKinsey.
Its research shows that a quarter of UK consumers have already done their Christmas shopping, while around one in 10 plan to do most of it during Black Friday.
Some consumers may have other priorities though, with Wales and England in action at the World Cup on Friday.
Retailers across Europe fear the overall Christmas shopping season could be the worst in at least a decade as shoppers cut spending while the costs of doing business show no signs of slowing, compressing profit margins.
HOLIDAY SALES
But many consumers still seem ready to shop on Black Friday. Idealo, the European price comparison portal, said that 65% of Italian online shoppers are ready to buy a product during the event.
In France, 70% plan to shop on Black Friday and Cyber ​​​​Monday, according to a study by PwC France.
However, Spaniards are less enthusiastic, with just 24% of shoppers planning to take advantage of Black Friday deals to get a head start on their Christmas shopping, according to the Spanish Association of Mass Consumer Goods Companies.
In the United States, the National Retail Federation (NRF) forecast holiday sales to grow at a slower pace this year, while Amazon forecast its weakest revenue growth for any holiday season in years.
In Britain, the Black Friday shopping period is particularly important for department store group John Lewis, consumer electricals retailers Currys and AO World, and general merchandise retailer Argos, part of the Sainsbury’s supermarkets.
But some major retailers, including Marks & Spencer, largely avoided the event.
More than a decade after it was introduced in the UK by Amazon, the value of Black Friday to retailers still divides opinion.
Proponents say carefully planned promotions in close collaboration with global suppliers allow retailers to increase sales and maintain profit margins.
Opponents argue that the discounts suck up Christmas sales with reduced profits and undermine consumers’ willingness to pay full price again before the festivities.

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