UK's Black Friday to add more woe to retail stores says Springboard
The migration towards online shopping is set to present major challenges to the UK's under-pressure physical shops with visitor traffic to drop by 3.7% on Black Friday this year, according to specialist footfall tracker Springboard.
That fall will be the worst single-day result for the overall Black Friday weekend with footfall across the event as a whole to drop by 2.7%. And while those figures may not look particularly big, they follow a 3.6% drop on Black Friday last year and a 1.1% dip over the weekend. With the two sets of figures added together, the decline starts to become significant.
Springboard said that the decline in footfall may come as no surprise to many retailers, “who are deliberately focusing on directing consumers online rather than in-store during the Black Friday period.”
In “stark contrast to failing footfall, online transactions are forecast to rise by 4% on Black Friday 2018,” it said. But even that isn't quite the good news that it seems as the rise of a year ago was a much healthier 5.5% (source: Loqate) so growth is clearly slowing.
And there's worse news. While online transactions may rise on Friday itself, Springboard forecasts that over the weekend, they will decline by 5% year-on-year. This is primarily due to the fact that “they rose significantly last year from 2016, by 24.2% on Saturday and by 25.8% on Sunday and this rate of growth will be difficult to maintain in the current climate,” we’re told.
The problem for bricks and mortar shops this year, apart from being caused by a move online, is because of economic pressures, Springboard said, as consumers deal with high debt levels, higher inflation and therefore reduced disposable income. The fact that Black Friday is a week earlier this year also means that it won't coincide with payday weekend as it did last year, so this could also have a negative impact.
The researchers also said that the anticipated decline in footfall and limited growth in online transactions “is likely to be exacerbated by the heavy discounting that has been taking place almost continuously throughout the year, together with the widespread debate around whether Black Friday discounts are discounts at all.”
The latter factor has spawned the promotion of price comparison websites that enable consumers to identify whether the product has ever been sold for less than the Black Friday sale price. But even where discounts are genuine, the fact that many fashion companies that have been discounting a lot due to unseasonal weather means the motivation to grab bargains will be less urgent for shoppers.
The end result of all this is that the company is predicting UK shopping centres in particular to be the biggest sufferers from declining footfall. That's a major problem given the high percentage of fashion tenants in those locations.
Springboard said that on Black Friday itself, UK shopping centre footfall should decline by 4.7% compared to only a 1% fall at retail parks. And across the three-day weekend, they should decline by 3%, worse than the 0.9% drop at retail parks.
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