Black Friday: No putting the genie back in the bottle now

The US import isn’t particularly great for British stores’ bottom lines

Simon Neville
Monday 16 November 2015 20:19
Comments
For some retailers, the US import hangs above them like a dark cloud
For some retailers, the US import hangs above them like a dark cloud

On a cold winter morning in a car park still in darkness, a gaggle of shoppers, journalists and store workers gathered outside a branch of Asda in Wembley, north-west London, to watch the official launch of the US-owned group’s Black Friday “celebrations” last year.

The supermarket’s PR department had invited the press and TV cameras to watch the scenes, which included entertainers on stilts and staff offering tea to the waiting crowds as a manager explained to shoppers that they would be let in 20 at a time.

They would be brought in, in their groups, through the first set of doors, then wait to go through into the main store in a calm manner, like astronauts waiting patiently in an airlock.

However, the photographers and panicked producers on site feared they would not get the requisite shots of customers battling each other over Polaroid TV sets – a brand now owned by Walmart – like a cross between Lord of the Flies and the London riots of 2011.

Somehow they managed to persuade the store manager to let shoppers squeeze up to the glass, then pull the doors open in a mighty reveal, leading to suitably chaotic scenes of pushing, fighting and screaming as everyone piled in.

A year later and Asda has decided to abandon its Black Friday ambitions, recognising – albeit just weeks before this year’s event – that marauding bargain-hunters would probably scare off Asda regulars.

But can the damage done by Asda’s import be repaired? Or is the allure too great for retailers to resist? If the forecasters are to be believed, this year’s Black Friday will be even bigger than last year’s – even without Asda’s participation.

According to research by Experian and the e-retail industry association IMRG, Brits will spend £1.07bn this Black Friday, which falls on 27 November, up from the £800m spent last year. The marketing agency Savvy reckons 41 per cent of shoppers are planning to get involved, with awareness of the shopping day reaching 94 per cent.

And with the day falling in November this year, the Office for National Statistics’ official sales tracker is also likely to show the busiest November on record. But behind all the razzmatazz, retailers privately hate Black Friday. One senior industry insider told The Independent: “It’s tiresome for everyone. Customers are not that keen, retailers are not that keen. Although it can show a spike in your sales, they are sales you were going to get anyway. The feedback from customers is they don’t want to miss out on a bargain, so feel they have to go for it, but they don’t like being pushed into it.

“There’s also a huge logistical problem around it, even if you’re just online. It’s a huge amount of prep and effort.”

He added: “It didn’t do Asda’s reputation any good. They don’t want scenes of undignified shoppers again.”

Most retailers are tight-lipped about how far they will go with Black Friday. Amazon will be taking part and Tesco revealed yesterday that it would close 24-hour stores from midnight to 5am to let staff prepare.

Currys PC World is also likely to take part, with chief executive Seb James regaling the City with tales of negotiating with suppliers over the cost of every last screw that will be used in the sale.

Clive Black, a retail analyst at Shore Capital, suggested that we could see retailers taking part, but in a more restrained manner.

“Asda has decided to review its stance on Black Friday in public,” he said. “We sense that many other retailers have more quietly followed suit, meaning that shoppers may like to pay more attention to the reality of the ‘amazing offers’ that are on show.”

Margins are the key issue retailers have with Black Friday. Christmas has always been the golden period – for obvious reasons – and this has sometimes led chains to lose their heads, slashing prices but losing out on profits.

Game Digital highlighted this last year by issuing a profit warning, and last month Argos’s parent company Home Retail Group put out a pre-emptive profit warning for this year’s Black Friday.

A report by KPMG/Ipsos said: “With the benefit of hindsight, retailers have to make a choice, and make it early – they are either in or out – but if they decide to participate, it’s crucial to get the strategy right and this needs meticulous planning and careful execution rather than snap last-minute discounting decisions.”

But with retailers hating it and customers equally unimpressed, can it disappear or is John Lewis managing director Andy Street right when he say: “It is impossible to put the genie back in the bottle.”

Analysts and experts are in general agreement that Black Friday is here to stay, but point out that if retailers want to regain the upper hand and stop sacrificing margins for the sake of a quick sale, they need better communication both with the customer and with each other.

James Knightly, senior UK economist at ING, said: “Some retailers have suggested that they will make less of an effort this year. This may be a bit of game theory to try and subtly convince other retailers to not pursue Black Friday aggressively and therefore improve profitability for the retail sector more broadly.

“However, game theory doesn’t always work and can end badly. It may be better for the retailers to talk directly with each other and try to weaken the Black Friday ‘brand’, labelling it as an Americanism that has no place in the British market.”

Whether the egos that run retail can agree on anything is another matter, but regardless of what happens on 27 November, Christmas shopping is here to stay.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in