Black Friday is making headway with bargain-hunting U.K. consumers, but their 3 billion pounds ($4 billion) in spending is doing nothing to help Britain’s troubled retail centers.
Sales on the day of discounting — a pre-Christmas concept imported a few years ago from the U.S. — rose about 7 percent, according to Barclaycard, which processes nearly half of all card transactions in the U.K. That suggests British consumers will still buy when the price suits them, even as Brexit fans inflation and cuts economic growth.
The gains were driven by online shopping, with Web sales up 6 percent, according to e-commerce researcher PCA Predict. The number of shoppers in stores was down by 3.6 percent, according to researcher Springboard, and there were no signs of the scuffles that erupted at some retailers three years ago as consumers raced to get their hands on discounted televisions.
The shift to more online spending has been driven by retailers, which have been “de-emphasizing their in-store offering while bombarding consumers with daily promotional emails for over a week,” according to Bryan Roberts, an analyst at TCC Global.
Early estimates suggest the gravitation toward online shopping was even more pronounced in the U.S., where e-commerce sales were up 16.9 percent, according to Adobe Systems Inc. Traffic in physical stores was down by 4 percent to 6 percent, Cowen & Co. analyst Oliver Chen estimates.
With no post-Thanksgiving day off to anchor the sales, U.K. merchants have spread Black Friday discounts over a longer period. That may reduce the appeal of so-called Cyber Monday, when online retailers in the U.S. traditionally join the discounting game. Through 11 a.m. Monday, e-commerce sales were down 3 percent from last year, PCA Predict said.
Last year, U.K. consumers spent about 2.9 billion pounds on Black Friday alone. While the cost of processing unwanted goods returned by trigger-happy bargain hunters may pose a risk to profitability, British retailers are becoming more adept at tailoring their offers.
“Retailers didn’t discount products by more than last year," according to Chris Chaviaras, an analyst with Bloomberg Intelligence. “They tried to maintain profitability."
Electrical stores lined up deals almost a year in advance on products they stock specifically for the event. Fast-growing online fashion retailer Asos Plc discounted all products by 20 percent in the hope of snapping up more loyal shoppers. Apparel chain Next Plc participated in Black Friday for the first time as a way of clearing unsold flip-flops and shorts.