Poor sales on Black Friday might help explain why many retail chains are blaming the cold snap for a falling performance
If there’s one surprise element to the retail sector’s grim new year, it’s the unexpected resilience of Black Friday sales.
The big bargains events, which traditionally happened in November and related to one of the main weeks in the retail calendar, were supposed to be the death knell for the high street.
Underlying sales for the sector excluding VAT (there was no VAT rate in the year before the introduction of the goods and services tax) fell by 2.9% in November, December and January. This followed a 0.9% decline in the first half of 2017.
Ruth Gregory, an analyst at Goldman Sachs, said despite the first quarter being traditionally the worst for trading, it was surprising that underlying sales were down by such a wide margin.
This was driven in part by what Greg said was a “dramatic increase in discounting” over Black Friday. The spending bounce that some claimed to see following the Boxing Day sales could have been almost entirely wiped out by discounting during Black Friday, says Gregory.
“We suspect much of the post-Black Friday rise in footfall and BOPIS [in-store on-line shopping] reversed over the four week period,” she says. “In particular, we suspect poor footfall days occurred on 4th and 12th December over discounting.”
Black Friday has fallen out of fashion in recent years – and has been outshone by Cyber Monday as the single biggest sales day for retailers – but for most of 2017 it had a positive effect.
For most retailers it was a nightmare, with only the fast-fashion chains making gains and grocery retailers again feeling the strain. Specialist clothing retailers such as Next, Primark and B&M continued to find the going tough, while watchmakers and jewellers reported weak trade. It was also the weakest week for grocers in six years.