After grim year, UK retailers hope for Black Friday tonic

Britain's retailers are hoping Black Friday discounts will get shoppers spending again after a torrid year for much of the sector.

A string of store groups have gone out of business or announced shop closures this year as they battle subdued consumer spending, rising labour costs, higher business property taxes, growing online competition and uncertainty over Brexit.

Toys R Us UK, Maplin and Poundworld have all gone bust, while Marks & Spencer , Debenhams , Mothercare and House of Fraser are between them shutting hundreds of stores.

Ads

British retailers are seeking respite from the annual promotional Black Friday event that was first imported from the United States by Amazon in 2010. More money has been spent every year since, though - after chaos and scuffles in stores in 2014 - it is now predominantly an online affair.

Research firm GlobalData forecasts UK spending during the Black Friday period - which it defines as Nov. 19 to Nov. 26 - will grow 3.1 percent to 10.4 billion pounds.

According to researcher Springboard, footfall on the main shopping streets is anticipated to drop versus 2017, while online transactions are forecast to rise.

Last week, official data for October showed British retail sales growth slowed to a six-month low, with shoppers holding off winter clothing purchases due to mild weather.

Recent company updates have also been subdued. Department store chain John Lewis has reported sharp sales falls over the last two weeks, while companies including M&S and Sainsbury's have sounded cautious.

INTO THE BLACK

Black Friday, the day after the Thanksgiving holiday, was so named because spending in the United States would surge and retailers would traditionally begin to turn a profit for the year - moving from the red into the black. It falls on Nov. 23 this year.

Its popularity has meant Britain's Christmas trading season now has three peaks - around Black Friday, the week up to Dec. 25 and the post-Christmas sales.

Like last year, retailers including Amazon, Dixons Carphone and Argos are stretching promotions over one to two weeks, seeking to smooth out demand and reduce pressure on supply and distribution networks.

Shoppers are being advised to check prices carefully. Consumer groups have repeatedly warned that some Black Friday deals are no better than other sales during the year.

The Black Friday concept still divides opinion.

Supporters say carefully planned, targeted promotions in close co-operation with global suppliers allow retailers to achieve a sales boost while still maintaining profit margins.

Naysayers argue the discounts suck forward Christmas sales that could otherwise be made at full price and can dampen business in subsequent weeks.

M&S is in the latter camp and will not be participating, but online electricals retailer AO.com says customers want it.

"We expect it to be bigger because we think the customer expects it to be bigger," said AO CEO Steve Caunce.