Last of big spenders: UK Black Friday to be final hurrah before prices rise
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Loading... - KATE TAYLOR
- 24 Nov 2020
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As the clock ticks down to Black Friday, aggressive promotions on everything from 4K TVs to tablet computers and winter coats could be the last hurrah for shoppers before price hikes in 2017.
After bargain-hunting consumers went on the rampage on Black Friday in 2014, fighting in the aisles for cut-price widescreen televisions, last year it was a much tamer affair, as shoppers retreated to the safety of seeking the best bargains online.
This year, there is likely to be more of a sense of going, going, gone on the high street’s hottest deals, because retailers across the board are signalling that the weakness of sterling will push up prices in 2017.
While just over half of businesses participating in Black Friday anticipate higher sales this year, fewer store chains are taking part, according to an industry poll by Barclays.
“This suggests that parts of the industry may be starting to resist what some see as an unwelcome discounting event in the run-up to the all-important Christmas trading period,” said Ian Gilmartin, Barclays’ head of retail and wholesale.
However, the Dixons Carphone chief executive, Sebastian James, remains bullish, confident that this Friday will be the retailer’s biggest trading day for a fourth consecutive year, as it offers 3,500 products in the black tag sale event.
“It’s not profitable for other retailers, but it is for us,” James said. “We get these amazing deals from manufacturers because we buy so much. For customers, it is a great day and we can still make money doing it.”
The Currys PC World owner expects to shift truckloads of household electronics, ranging from 50in Samsung 4K TVs and Microsoft Surface Pro tablets to American-style fridges and Dyson cordless vacuum cleaners, as shoppers increasingly use Black Friday to upgrade their domestic appliances, alongside buying gifts.
A PricewaterhouseCoopers survey found that shoppers planning to bargain hunt this weekend had earmarked an average spend of £203, with electricals and technology top of their lists. This year’s hot gadgets include bean-to-cup coffee machines and high-pressure steam irons.
James said: “The difference between us and the supermarkets is we have offers running right through the range, [including on] a big OLED TV that would [normally] cost you £3,000. We’ll do a deal on that. We’re not just selling cheap Chinese tellies.”
Suppliers including HP and LG have devoted several weeks to producing stock for the event.
Looking further ahead, fashion retailer Next has said its clothing prices will rise by up to 5%. On Tuesday, John Roberts, the chief executive of the company behind electrical goods website AO, confirmed that suppliers were starting to charge more. Shoppers will feel the brunt of this in January, he said. Apple has pushed up the price of every computer in its range, while Microsoft and Dell have also signalled that price hikes are on the way.
The Marmite standoff between Tesco and Unilever exposed high levels of tension in price negotiations. “We are having a lot of quite tense discussions about [price],” said James. “We should. It’s our job to make sure people get great prices. We’re lucky because we are very big and those discussions are often quite productive.
“All our products are made outside the UK and denominated in dollars or Chinese yuan. As a result, it is a mathematical certainty that we need more pounds to buy those same products, so it’s how we manage that.
“At every point in the range, prices inevitably are going to go up ... but you’ll still be able to get a telly that is a lot better than the last one you had.”
While more than 80% of British shoppers bought a gadget during the 2015 Black Friday sales period, retail analysts at Verdict predict that canny shoppers will also be on the lookout for clothing deals this year.
“We expect participation in this sector to grow this year, as retailers such as Next have forewarned of price increases,”said Verdict’s Zoe Mills. “There has been a lot of discussion about the impact of Brexit. I think shoppers are very aware that prices are going to rise and they see Black Friday as an opportunity to get something cheaper than in the new year.”
