Experts say Black Friday “influence is waning”

New research from GlobalData has found Black Friday’s influence may be waning as growth in sales over the promotional event is set to slow down for 2019.

With just seven days to go until Black Friday arrives, GlobalData said promotional sales will rise 2.2 per cent to £4.3 billion in the fourth quarter, but this will put added strain on retailer profitability.

“Black Friday promotional sales continue to outperform the overall quarter as shoppers both delay spend that would have otherwise occurred before the event, while other shoppers bring forward spend, for example to capitalise on the low prices when purchasing Christmas gifts,” said GlobalData retail analyst Zoe Mills.

READ MORE: Black Friday 2019 to see slowest growth on record “and may potentially even be completely flat”

“However, its influence is waning as growth is forecast to be 2.2 per cent versus 3.5 per cent in 2018. We are also seeing an increasing number of retailers discount ahead of the promotional event, often depicting these sales as a pre-Black Friday promotion,” Mills added.

“While this may ease the demand on logistics operations over the period, it will mean that shoppers demand ever steeper discounts during Black Friday as they expect something more from retailers during this time.”

GlobalData pointed out that Black Friday falling later in the month is likely to have had an impact on spending during the period.

As 2019’s Black Friday event is comparatively late in the month compared to other years, it will also fall over payday weekend, meaning shoppers will have the funds to spend across the promotional activity.

Fashion and beauty is set to remain the best performing sector during the Black Friday period, forecast to grow by 2.7 per cent. However, GlobalData noted that this will be driven predominantly by the health and beauty sector while many clothing and footwear retailers are heavily discounting ahead of the promotional period.

As concern over sustainability in the wake of impulsive spending grows, Mills also added that many retailers and consumers are likely to shun Black Friday, mentioning Deciem, who will be shutting their stores on Friday November 29.

“Its impact will be small in 2019, but as we have seen throughout the year as more consumers – and as a result, retailers – place greater emphasis on environmental concerns, shopping habits may begin to change in the future,” added Mills.

Last week IMRG said Black Friday and Christmas trading peaks are unlikely to save online retail sales for the year coming significantly below expectations.

The firm predicted at the start of 2019 that the online retail market would grow nine per cent for the full year, after nine months of data this figure stands at just 4.9 per cent.

“In short, it’s difficult at this point to see how the peak trading period is going to be anything other than weak from a revenue perspective, and may potentially even be completely flat,” IMRG stated in a recent report.

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