Black Friday not enough to boost UK November sales

By

Sandra Halliday

Published
Dec 5, 2017

The UK fashion retail sector was pinning its hopes on Black Friday and the associated shopping days to rescue what has been a weak autumn season so far. But it doesn’t appear to have achieved that aim.

After a slow October and early November, the Black Friday rush was characterised by an increasing move online and little action in physical stores, it seems.

On Tuesday, the British Retail Consortium (BRC) and KPMG’s regular monthly report showed that mass discounting did encourage consumers to spend. But the increase was meagre given the depth and extent of the markdowns and shoppers were clearly focused on saving money as the bought into Black Friday rather than spending more than usual.

The BRC said lower prices failed to "fundamentally shift underlying trends in spending” and added that stores would be left "wondering whether the juice is worth the squeeze".

Overall, the figures show that last month’s sales rose only 0.6% on a comparable basis, but more discretionary income was diverted to essentials such as food and drink, as well as petrol, in the face of inflation that has reached 3%.

So where did that leave non-foods of which fashion is a huge part? Well, sales of non-foods in physical stores dropped 3.7% on a comparable basis in a month when promotional activity should have spurred at least a small increase. In the second half of the month, the fashion sector was offering discounts of at least 10% and often up to 50%.

Some categories did well, such as beauty and wearable technology, but fashion wasn’t among the winning market segments.

Online sales around Back Friday Weekend did rise, but not by enough to bridge the gap. They were up 6.4% year-on-year but added only 1.8 percentage points to overall growth in non-food retail sales. 

BRC chief executive Helen Dickinson said of it all: "This year's Black Friday has demonstrated that in such a tough economic environment, consumers have become ever more careful, willing to wait and deploy their discretionary income only when they see an exceptional bargain. That heralds a challenging festive period ahead for retailers and shoppers alike.”

Paul Martin, head of retail at KPMG, said the tough retail backdrop meant that for retailers, “the difference between success and failure [is] akin to … walking a tightrope.”

He said stores “would be wise to focus on differentiation, personalisation and ensuring the availability of their products in the coming weeks.”

Of course, reports on retail success or failure will vary depending on where the data comes from. In the BRC’s case, a large number of physical and online retailers give it their data. So did the regular Barclaycard monthly report, which is based on actual transactions via credit and debit cards, offer up any better news? Not really as it also largely supported the BRC data.

The payment cards giant said consumer spending grew by 2.8% year-on-year last month, still below the inflation figure and still unimpressive given Black Friday’s impact. It said in-store spend dropped 0.1% and while e-spending rose a healthy 10.8%, that was below August’s impressive 15.7% hike and looked weak given the large number of online markdowns available.