Desperate shops gamble on £8bn Black Friday spree
SHOPPERS will spend nearly £8billion this weekend as stores slash prices for Black Friday.
Discounts on some products are expected to be so big that sellers will actually make a loss.
Retailers are using bargains to lure shoppers through the door – as they struggle to reverse a drop in sales fuelled by a squeeze on household budgets.
Price cuts of 40 to 50 per cent are being promoted on many clothes and electricals, with the biggest deals seeing around two-thirds knocked off the cost.
A record number of stores are running promotions as they fear losing business to rivals or online giant Amazon.
Even Next has felt the pressure, and for the first time has brought forward its Boxing Day sale to start at 3am today. It has previously refused to hold sales in the run-up to Christmas.
Spending across the board is expected to be up 7 per cent on last year to reach £7.8billion over four days from today, according to the Centre for Retail Research and VoucherCodes website.
The warm autumn means fashion sellers are looking to offload masses of unsold coats, boots and woollens.
Meanwhile, industry data has shown a slump in sales of furniture and household electricals from washing machines to TVs. These products will have particularly big reductions.
However some analysts warn that the price cuts could amount to disastrous self-harm. Apart from potentially selling items at a loss, there are huge costs involved in delivering items bought online and handling returns.
James Brown, from pricing experts Simon-Kucher, warned: ‘Black Friday is now a real experience and shoppers love finding a bargain. But for some businesses they will slash prices so much that they accidentally turn it into their most disastrous day of the year.
‘We’ve reviewed thousands of promotions by hundreds of businesses, and we’re confident that many will make dramatically less than they expect. Some will even make a loss.’
His warning came as a survey revealed Scots are being put off spending as much this Black Friday because it falls too early.
Scots will spend an estimated £181 compared with £187.55 in 2016 – although this is higher than the £57.73 average in 2015.
Those behind the survey claim it could be down to the day of the global sales spree coming before some people get paid.
Claire Reid, head of assurance at PwC in Scotland, said: ‘Next year’s figures will show better if this is the start of a trend and Scots are no longer bothering with the perceived early bargains.’
Retail analyst Richard Hyman described Black Friday as ‘crazy’ in terms of damaging profits.
‘Much of the trade would love to opt out but in this weakest of all retail markets, few have succeeded,’ he said. ‘With demand thin, Black Friday will essentially suck Christmas sales forward.’
Some estimates suggest the Black Friday weekend will hoover up 40 per cent of all spending on Christmas. Amazon was at the forefront of bringing the American sale event to the UK in 2010.