Black Fri­day’s shadow over the High Street

Scottish Daily Mail - - City & Finance - by Tom Witherow

RECORD Black Fri­day sales will do noth­ing to al­le­vi­ate the chill on the high Street, ex­perts have warned.

Shops have en­tered a sales arms race, launch­ing Black Fri­day dis­counts two weeks early in a des­per­ate bid to en­tice shop­pers through the door.

Re­tail­ers are ex­pected to pull in £8.5bn, or £310 per house­hold, be­tween Black Fri­day on Novem­ber 29 and Cy­ber Mon­day on De­cem­ber 2.

But ex­perts warned that the move will back­fire and ac­tu­ally in­crease the pain felt by the high Street.

They ar­gue that the sales pe­riod does not lead to more spend­ing over­all, as Christ­mas shop­pers just move their present-buy­ing ear­lier to take ad­van­tage of lower prices.

They also claim that tighter mar­gins will lower prof­its and put more firms at risk of go­ing bust or clos­ing stores.

Dozens of shops have al­ready gone bust or re­duced the num­ber of stores as fall­ing con­sumer con­fi­dence, ris­ing wages and busi­ness rates bite.

The lat­est fore­casts sug­gest in­ter­net firms ben­e­fit most from Black Fri­day sales, at the ex­pense of the high Street.

Sales are pre­dicted to grow by 8.3pc on­line dur­ing the pe­riod, but fall 0.2pc in­store.

Sev­eral shops, which in pre­vi­ous years would be selling goods at full price, are al­ready of­fer­ing heavy dis­counts.

Cur­rys PC World, John Lewis and wine firm Majestic, now called Naked, are of­fer­ing dis­counts of up to 50pc.

Depart­ment store chain Deben­hams has dis­counts of up to 72pc and h&M has some of­fers with more than 50pc off.

The com­pa­nies all hope the dis­count­ing will boost their prof­its and, for those that are listed, their share prices.

But some of their com­peti­tors have taken a stand against the shop­ping spree, which was first in­tro­duced in the US around the Thanks­giv­ing hol­i­day week­end.

Next boss Lord Wolf­son said his com­pany would never take part, be­cause selling stock at a dis­count in the cru­cial Golden Quar­ter sales pe­riod – which be­gins in Oc­to­ber and ends in De­cem­ber – puts re­tail­ers on a ‘hid­ing to noth­ing’. Su­perdry co-founder Ju­lian Dunker­ton said his shops would, for the first time, not be tak­ing part for the same rea­son.

As part of Marks & Spencer’s new strat­egy in its clothes and home di­vi­sion, it has also es­chewed lengthy sales pe­ri­ods – for ex­am­ple, cut­ting its au­tumn sales down to two weeks this year. It will not put cur­rent full-price items in the Black Fri­day sale.

Thomas Pugh, of Cap­i­tal eco­nom­ics, said: ‘Black Fri­day hasn’t typ­i­cally gen­er­ated higher sales over­all. In­stead, higher spend­ing in Novem­ber has been due to shop­pers tak­ing ad­van­tage of Black Fri­day dis­counts to buy Christ­mas presents early, which trans­fers some sales from De­cem­ber into Novem­ber.’

Zoe Mills, re­tail an­a­lyst at Global Data, warned that the longer Black Fri­day pe­riod would lead shop­pers to de­mand ever steeper dis­counts.

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