Black Friday discounting likely to continue over Christmas.
Black Friday deals
Fashion retailers will be forced to discount in the run-up to Christmas to maintain sales momentum after Black Friday, industry sources have predicted.
Retailers such as House of Fraser, Marks & Spencer and Debenhams have all made efforts to cut down the number of days they are on Sale this year. But these strategies may be undermined by a perfect storm of rising costs and increasingly aggressive competition.
“A lot of retailers want to back off from Black Friday this year, but the problem is trade is really tough at the moment, so businesses need to drive that top line,” said the boss of one nationwide footwear chain.
“Inflation hitting consumer confidence, the weak pound, the living wage – they are all affecting trade. While retailers might not want to promote, they find that they have to in order to generate cashflow and clear stock.
“Once you trigger that Sale for Black Friday, you almost have to continue it until Christmas as you have led the expectation that you will discount. It is nearly impossible to just turn it off.”
New research from analysis firm Fung Global Retail & Technology suggests shoppers are only prepared to pay 76% of full price for womenswear.
In partnership with cloud-based technology company First Insight, it analysed 57,000 products sold in 11 countries between January 2013 and June 2016, and identified a “persistent and significant gap” between retailer and consumer expectations.
The chief executive of one premium womenswear retailer told Drapers: “It’s not a crisis of consumer confidence as such because our customer is not feeling any poorer – it’s more that there’s so much choice and she can afford to wait until the weather changes or there’s a really good offer. It is so competitive.
“I think Christmas will be very similar to last year – and last year was pretty bad.”
Research firm Mintel predicts Christmas retail sales will rise 2.5% to £42.2bn this year, but only if retailers take a sensible approach to Black Friday.
“December’s results will very much depend on what retailers do about Black Friday. If they cut back on promotions, there will be a knock-on benefit to December, as sales roll over into this month,” said Richard Perks, Mintel’s director of retail research.
But he added that the colder weather this year should help retailers to sell more autumn stock, reducing the need to discount as heavily.
“In 2015, December’s results were weak, partly because of Black Friday and partly because of the unseasonable weather, which seems to have been a constant story over the last year. So the comparisons this Christmas [will be] easier.”