Black Friday will be bigger next time, say bosses
BRITAIN’s biggest online retailers have warned Black Friday will be even bigger next year despite hopes from some rivals that the extreme discounting seen before Christmas will not be repeated.
Alex Baldock, chief executive of Shop Direct, said: ‘Black Friday has fundamentally changed how people shop. Real traders thrive in this environment and we’re planning to make it even bigger and better next time.’
Shop Direct trades online as as very. co.uk, Littlewoods and Woolworth and turns over £1.7 billion a year.
Baldock’s hopes clash with those of some other retailers, including John Lewis boss Andy Street who said last week he hoped 2014 had been ‘the high water mark’ for Black Friday.
The late November sales frenzy proved a mixed blessing for retailers. Electrical retailers are thought to have performed well, but others, notably in fashion saw profit margins hit by the need to match rival discounting after an already difficult autumn of mild weather. There is also evidence discounts did not boost total seasonal sales for many retailers, but that consumers merely brought forward their Christmas shopping and bought at lower prices.
Figures from Barclaycard this weekend show that after a huge rise on Black Friday, consumer spending in December increased by just 4.1 per cent.
Supermarket groups appear to have performed better at Christmas than anticipated with Tesco and Sainsbury reporting higher than expected numbers last week. The The City believes that pattern will continue this week with Morrisons, albeit from a poor recent trading record.
The consensus among City analysts is for Morrisons’ same-store sales to be down 3.8 per cent in the six weeks to January 4. While still unwelcome, this would be a significant improvement on the 6.3 per cent fall in the previous three months. But some stockbrokers said Morrisons may do even better. In a research note, Citi analyst Pradeep Pratti said: ‘Both Sainsbury and Tesco have reported better than expected Christmas sales and we think Morrisons also would have benefited somewhat from customers spending a bit more over the holidays.’
Morrisons’ chief executive Dalton Philips was one of the first grocery bosses to convincingly react to the threat of German discounters Aldi and Lidl when he announced a wave of price cuts last March. Then in October he said he would price match both the fast-growing chains.
In November he said he expected to see Morrisons’ performance ‘bouncing back’ from its lows over the past year, despite ongoing food price deflation.
Sainsbury’s and Tesco have since followed suit. But attempts to move on to a more offensive footing have seen supermarket profits haemorrhage and share prices fall.