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THIS WEEK IN PEAK Retailers now in full discounting mode ahead of Black Friday

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Retailers now in full Black Friday flow

Retailers from Debenhams to House of Fraser, Screwfix to Currys PC World and Bonmarché to Boots are now running their Black Friday deals, with the biggest day of peak trading, expected to come this Friday. Notable hold-outs include Marks & Spencer, while Asda is offering a series of in-store deals, badged as Green is the new Black. 

The Black Friday deals come in what is a make or break Christmas for retailers, says Andrew Westbrook, head of retail at audit, tax and consulting firm RSM

“With consumer confidence being rocked by Brexit-related uncertainty, the competition between retailers to secure their fair share of spend has led many to go deeper and earlier than ever with their Black Friday discounting,” says Westbrook.

“Retailers such as Amazon and Debenhams have already started their sales in order to capitalise on early consumer online spend in anticipation of the cold snap keeping many indoors this week.

“Businesses that have purchased large volumes of seasonal and gifting stock will be holding their breath in the hope that sales materialise. If they don’t, many stores may be forced deeper into flash discounting. Consumers who hold fire until later in the sale may well be able to pick up bargains, particularly for in-demand tech products.

‘The tough trading environment during the first half of this year underlines how important it will be for businesses to generate strong sales this quarter, even if it means sacrificing margin. The risk of being left with too much stock and a low cash balance to meet payroll and quarterly rent demands in the first quarter of 2019 will be focusing minds in the boardroom.

“The run-up to Christmas has never been more important to retailers’ results – and potentially their survival.”

Latest Black Friday forecasts

Mintel is forecasting that shoppers will spend £23.5bn on non-food retail sales over the course of December, and £18.6bn on food sales, with online sales set to generate £11bn during the month. Overall, it says, December’s retail sales will reach £47.7bn, up by 4% compared to the same time lsat year. Pureplay retailers will see sales worth £5.6bn. The December figures come as Mintel’s research finds that  66% of Black Friday shoppers in 2017 felt discounts were not as good as they were made out to be. 

Richard Perks, director of retail research at Mintel, said: “We think that retailers can look forward to a reasonably good Christmas—not outstanding, but it won’t be bad either. While there are some reasons to be cautious, such as falling consumer confidence, there is no real sign of an underlying slowdown in retail sales growth. Retail sales have held up well this year and we expect the recent momentum is likely to be maintained, with retail sales growing at about 4% both in the final quarter of 2018 and in December itself.

“While there’s been much talk of how the High Street is being undermined by online retailing, it still only represents a relatively small part of overall retail sales, with most shopping still taking place in physical stores.”

Research for Mintel’s Black Friday UK 2018 report was carried out among 2,000 internet users aged 16 and over in December 2017.

Black Friday discounts questioned

A Which? investigation has questioned how good the discounts really are on Black Friday. It found that nine in 10 of last year’s Black Friday deals were cheaper or the same price at other times of the year, and it’s warning shoppers to do their research before buying.

Which? tracked the prices of 94 products, from cameras, and TVs to fitness trackers, that were on offer over Black Friday 2017 and found that 87% were cheaper at times of the year other than Black Friday. Looking at the two weeks around Black Friday, it found that 76% of products were cheaper or the same price at other times of the year, and that 74% could be bought for less in the six months following. 

Alex Neill, Which? managing director of home products and services, said: “The results of our investigation will disappoint many who are expecting nothing but bargains this Black Friday.

“While retailers are bombarding us with promises of great discounts and time-limited sales, it’s clear that not all deals are as good as they might appear.” The study looked at deals on offer through retailers including Argos and JohnLewis. Argos said: “During Black Friday our customers benefit from a huge range of deals on a wide range of products, all at the same time. This does not exclude these products from other promotions.”

A John Lewis spokesperson said that prices were matched throughout the year as part of its Never Knowingly Undersold commitment, meaning that when competitors run promotions prices are lowered to match, and that the Black Friday period was no different.

Image: Fotolia

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