By Jessica Menton - The Black Friday frenzy, traditionally the biggest U.S. shopping day of the year, is now spreading across the pond, as the sales promotions are expected to grow sharply in the U.K. this year. But a coming backlash could prevent it from reaching across Europe.
Retail giant Amazon.com Inc. has targeted the U.K. with Black Friday deals over the past few years, and as a response, U.K. retailers ramped up Black Friday promotional bonanza in 2013.
SalesGossip, a fashion sales firm in the U.K., complied data revealing that 142 U.K. retailers, mostly national chains, had Black Friday and Cyber Monday sales last year, and the firm predicts that will increase by 50 percent in 2014 compared with 15 percent a year ago.
“This year seems to be as big a promotion as Boxing Day,” said Elizabetta Camilleri, founder and chief executive officer of SalesGossip, referring to the national holiday that is traditionally celebrated the day after Christmas in the U.K.
The rise in Black Friday promotions is a combination of both U.S. and U.K. retailers, including American fashion chains Forever 21, The Gap Inc. and Banana Republic. British department store House of Fraser, along with high-end department store Selfridges, hosted Black Friday sales last year and is expected to hold promotions again this year with a long list of other retailers.
Even so, Camilleri predicts an eventual backlash against Black Friday’s transatlantic migration. U.K. retailers are undercutting each other too sharply to the point that consumers are no longer motivated to pay full price anymore, says Camilleri. While the early morning store openings and door-buster sales have yet to arrive in the U.K., they may be on the horizon, but the Black Friday frenzy has yet to spread across Europe.
“Black Friday is a phenomenon in the U.K., but we don’t see it in the rest of Europe,” said Camilleri. One reason is because legislation up to a few years ago was much more restrictive on when retailers in Europe could host promotions, so the sales mentality is not as strong in Europe as across the U.K.
From the retailer’s perspective, Black Friday promotions this year could be a solution to recent woes after warm weather made for difficult sales in October. Now that retailers have extra autumn and winter clothing in stock, Black Friday could be a good opportunity to sell their extra stock to consumers. “I think retailers can be much smarter about their promotions and use sales to differentiate themselves from competitors as opposed to what they’re doing, which is to follow the crowd,” Camilleri said.
Retail sales in the U.K rose by 0.8 percent October from the previous month and climbed 4.3 percent from a year earlier, according to the U.K.’s Office for National Statistics. Online sales increased by 7.5 percent from a year earlier, which was the lowest year-over-year increase since November 2012.
“While online sales have shown some loss of momentum, we expect this to pick up in November as retailers and consumers prepare for what are likely to be record breaking Black Friday and Cyber Monday sales,” Ian Geddes, U.K. head of retail at Deloitte, said in a report.
U.K. consumers are forecast to spend 42.4 billion pounds this Christmas, a 1.5 billion pounds increase from a year earlier, according to a recent report from Deloitte. Online spending is forecast to account for about 13 percent of December sales, up from 12 percent a year ago.