Displaying items by tag: Black Friday

Tuesday, 03 December 2019 15:10

ChicGeek Comment Making Or Scraping It Through 2019

Black Friday dales retail salesI said it at the start of this year if you’re a brand or retailer and you can make it through 2019 and into 2020 then you’re probably going to be alright. This year has been tough, very tough, and we’re well into the most important segment of the year for some retailers. It’s do or die for many brands who are on their uppers while trying to flog customers theirs. 

This period of physical retail contraction is more painful the larger you are and we’ve waved goodbye to some very well known retailers and brands this year which could no longer survive under the perfect storm of online competition, retail saturation and squeezed prices, increase in the minimum wage, Extinction Rebellion/consumption debate, Brexit uncertainty and a snap General Election, cost of returns, prolonged discounting and high business rates and rents. 

Christmas has always been a crucial time for retailers, but if it’s your single focus and main time to make profits then you need to rethink your business model and marketing. Many businesses with this old fashioned idea are many of those disappearing or have disappeared. But, it still matters, and a bad Christmas period will see many more retail business announcing their demise come the new year.

The lead up hasn’t been good, but a lot of spend could be skewed by the juggernaut of Black Friday. Sales decreased by 1.3% in September 2019, the worst September since BRC (British Retail Consortium) records began in 1995.

The following month, high street shoppers bought 0.6 per cent more goods in October 2019, representing a drop from 1.3 per cent sales growth recorded in October 2018, but still representing the retail industry’s best performance since April, according to figures compiled by the BRC and KPMG. Looking at a three-month average, which allows for month-to-month fluctuations, total in-store sales of non-food items dropped 3.6 per cent, while food sales grew 1.6 per cent (or 0.5 per cent on a like-for-like basis). 

According to Barclaycard, "consumer spending in November (2019) showed a muted 0.9% growth year-on-year as Brits plan for a frugal festive season”.

So far, so bad, but Black Friday was the biggest ever. According to retail intelligence firm Springboard, retail footfall on Black Friday was up 3.3% in comparison with the same day in 2018, with shoppers mostly hitting the shops after work. Black Friday spending rose 16.5% on 2018, Barclaycard said. They said spending was higher as of 10am that morning and “sustained” that high level throughout the day. They said the number of transactions then reached a “new peak” between 1pm and 2pm on Black Friday. Barclays, which has been monitoring real-time transaction data for Black Friday, processes almost £1 in every £3 spent in the UK.

“We recorded a new peak of 1,184 transactions per second between 1pm and 2pm, which is up on last year’s 1,087 by around nine per cent,” Rob Cameron, CEO of Barclaycard Payments told City A.M.

“The volume of transactions has been up all week and in terms of purchasing, we have seen a high level on spending from midnight all the way through.

“This is fantastic news for retailers, with our data showing that transactions have also been strong throughout the week,” says Cameron. “With many retailers spreading their deals out throughout the week, they will be encouraged to see this hasn’t cannibalised sales volumes on Black Friday itself.” he told City AM.

The volume of transactions on Black Friday rose 7.2% year-on-year, while the volume of transactions on Cyber Monday - the following Monday - was so far up 6.9%.

While this discounting could affect margins, it appears the hype of Black Friday and perceived discounts is something retailers are taking advantage of. The consumer title, Which? warned that few real deals were available, with most goods cheaper or available for the same price at other times. It found that just 4 of 83 products they studied last year were cheaper during the Black Friday promotions.

Black Friday benefited from falling on or just after payday this year with many people paid on 28th of the month. Black Friday has been big, but has is been big enough? The last few years saw many retailers see a wash of sales just before Christmas which allowed them to limp on into the next year.  It appears that retailers are finally understanding how to play the Black Friday game; getting rid of unwanted stock while holding firm on in-demand products. It will be interesting to see the level of returns and this giant spike can be difficult to manage, especially for smaller retailers which less stock holdings. 

The retail figures show a consumer holding tight until to Black Friday, and it will be interesting to see, now those purse strings have been loosened, whether it continues in the final few weeks until Christmas especially with the distraction of a General Election bang in the middle of that. See you in the next decade?

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Published in Fashion
Monday, 17 December 2018 13:12

ChicGeek Comment November Pain

ASOS profits down black fridayThe darling of British online retail, ASOS, today, issued a statement saying it saw “significant deterioration” in trading in the run-up to Christmas. Blaming the weather and a high level of discounting and promotional activity across the market, it said it lead it to increase its own special offers, which typically eat into profit margins. 

November 2018 is set to go down as one of the worst retail months in recent memory. Mike Ashley, the Sports Direct boss, was recently quoted as saying, “November was the worst on record, unbelievably bad”. He said “No one could have budgeted for that. Retailers just cannot take that kind of November. It will literally smash them to pieces.”

Left - ASOS' HQ - Black cats for Black Friday?

While ASOS only saw a slowing in sales growth - it now expects sales growth of 15% for the year to August 2019, down from 20% to 25% - it also shows the chill running through the entire retail sector.

A perfect storm of lower footfall, Black Friday discounts, Brexit shaking consumer confidence and a highly competitive market in general, is making things very dicey for the retail sector. Retailer, Stuart Rose, formerly of Marks & Spencer, told ITV News, “I sense this is a very slow Christmas … You have the uncertainty of Brexit, people are uncertain about what the future is going to look like next year. [Consumers] have their hands in their pockets. Car sales? Down. House sales? Down. Big ticket sales? Down. I suspect there will be some uncomfortable trading statements in the early part of January.”

Even the juggernaut of Primark is reporting a slowdown. It has warned of “challenging” trading conditions. John Bason, the finance director of Primark’s parent Associated British Foods (ABF), said “I think it is a call on quite mild weather during November and I think it’s affected footfall.” This is important to Primark because it doesn’t sell online. Bason told Reuters that while sales at stores open more than one year were “just positive” in September and October, they had turned negative in November. 

On a brighter note, overall consumer spending rose 3.3% year on year in November, but it was the lowest growth since March, despite the boost from Black Friday, according to Barclaycard. Clothing spending contracted by 2.9%, the biggest fall since October 2017, while spending on household appliances was down by 14%.

One thing interesting to note is ASOS mentioning its slowdown in Europe. It said trading conditions across Germany and France, which account for 60% of the retailer’s EU sales, have become significantly more challenging, which means this is a wider problem than Brexit. ASOS said “The current backdrop of economic uncertainty across many of our major markets together with a weakening in consumer confidence has led to the weakest growth in online clothing sales in recent years. We have recalibrated our expectations for the current year accordingly.”

Primark Birmingham profits down black friday

So, let’s look at this weather. According to the Met Office, “November began with relatively cold quiet weather, but from the 3rd to 14th it was mild with a predominance of southerly winds. It was cold with easterly winds from the 19th to 26th, with frequent rain or showers for the east and south-west. It turned very mild, wet and windy in all parts of the country from the 27th onwards. The provisional UK mean temperature was 7.3 °C.” This up and down weather isn’t particularly unusual for November and we had two decent cold spells to help shift more seasonal, colder weather stock. The weather is always an easy excuse for retailers reporting bad figures.

Right - Primark is opening its largest store in the world in Birmingham this month

Black Friday, though, is wiping out profit margins for retailers with consumers expecting huge discounts and it’s stopping people from hitting the high-street. UK retail endured the biggest drop in footfall for the month of November since 2009. It also marked the 12th consecutive month of footfall decline. Discounts were made for online; no pushing and shoving to then leave disappointed. If they’ve got it, it’s in the basket, and you probably don’t buy anything else while you’re there unlike if you’d gone to the high-street or a shopping centre.

Laura Ashley just announced it was closing a further 40 stores and, last week, Bonmarché issued a profit warning and Blue Inc fell into administration.

Many retailers will be praying for a good Christmas, but to make up these sales in the three weeks to Christmas will be tough, especially with so many factors working against them. Primark and ASOS are strong retailers and will weather this storm, but many will not. To continue the weather metaphors, this could be the hardest frost to hit the retail sector in many years and anybody small or not hardy enough will be dead before the winter is out.

Published in Fashion
Friday, 25 November 2016 01:22

ChicGeek Comment Fashion Black Friday

Black Friday Retail CommentI’m a believer that Black Friday is a good way for fashion retailers to get rid of stuff. Let’s be honest, if you haven’t got rid of most of this season’s fashion by the end of November it’s probably going into the sale anyway. Rather than wait until after the Christmas glut and the fatigue that takes the shine off most of these items, it’s a fresh and early sale that can still make the current season look alluring and new-ish. A late mid-season, maybe?

Left - Somewhere in the world there is a sale on

For an important season it is very short. It really only has between September and November to shift fashion. By the time you get to December fashion is dead and it’s all about Christmas. Many brands, now, deliver their new season in November, so again, another reason to mark down on Black Friday and ride the hysteria of, mostly, internet sales.

For some reason, unbeknownst to me, many retailers still think the clock strikes September and we all crave polo necks and thick tweed coats. Autumn is warm, now. Maybe a few more layers, but the idea that it nosedives to below zero the minute summer is over seems old-fashioned or stupid and people don’t want to plan or buy ahead, they want to wear now.

Men like discounts and a bargain and I think there’s enough time between Black Friday and Boxing Day to probably get the sale driven person twice. 

Black Friday may not work for all types of retailers. but, for fashion retailers, it’s another sales opportunity basket to put their eggs in and they need as much help as they can get at the moment.

Published in The Fashion Archives

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