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[LONDON] As UK consumers start to suffer from Brexit jitters, British retailers have extended the Black Friday discounts they borrowed from America over as much as two weeks to lure wary shoppers online and in stores.
They need a push. The slide in the pound after the UK's vote to leave the European Union has driven up the cost of imported goods and led to higher prices on shop shelves. Britons' spending power is also under pressure from stagnant wage growth, which has fallen behind inflation, and the first interest-rate rise for a decade.
All of that magnifies the importance of tapping into holiday shopping budgets before the competition. October sales in the UK's midmarket stores were the worst in memory, down 5.2 per cent from a year earlier, according to business advisory BDO LLP. With a lot of stock to shift, major chains including Dixons Carphone Plc's Currys PC World, AO World Plc and Halfords Group Plc began Black Friday promotions earlier this year, according to Richard Hyman, an independent analyst.
That might not be enough to drive squeezed British shoppers to part with more cash. Only 16 per cent of 1,000 UK consumers surveyed by the Royal Bank of Canada said they planned to spend more during Black Friday promotions this year than last, with 21 percent planning to spend less and 63 per cent aiming to stick to last year's budget.
The survey results and retailers' swollen inventories are a marginal negative for the sector, RBC analysts led by Richard Chamberlain said in a note, tempered by an earlier payday cycle this season and the fact that Christmas spending tends to be less discretionary than usual.
"The basic idea is still great - to stimulate traffic either to your home page or to the stores - and it still works," Andreas Inderst, a London-based analyst at Macquarie Capital, said of Black Friday. "But if everyone is doing it, it's getting a bit diluted." The Black Friday push has become especially important for online retailers such as Asos Plc and Zalando SE as they compete with Amazon.com Inc, helping them to spread logistical pressures away from the days closer to Christmas, Inderst said at a media roundtable this week.
Without the four-day weekend that spawned post-Thanksgiving trips to shopping malls in the US, the sale concept relies more on e-commerce in Europe.
"Can't wait for Black Friday?" Asos is asking on its website, pointing visitors to links for 70-per cent-off sales in its outlet department.
The expansion of the Black Friday period goes beyond the UK. Zalando has extended Black Friday discounts to shoppers in Belgium throughout this week, leading to a broad 20-percent-off sale on Friday. In Germany, consumer-electronics company Saturn is touting a "Black Week" that started Saturday and runs through Friday.