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Cost-of-living crisis casts shadow over Black Friday in Europe
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A pedestrian walks past a shop in Paris, on Nov. 25.EMMANUEL DUNAND/AFP/Getty Images
Europe’s retailers are hoping Black Friday discount day will get shoppers spending, though it is taking place against a backdrop of a worsening cost-of-living crisis and the distraction of the soccer World Cup.
Retailers across Europe fear the overall Christmas trading season could be the worst in at least a decade as shoppers cut back, while the costs of doing business show no sign of abating, squeezing profit margins.
Double-digit inflation has dented consumers’ purchasing power and their confidence is also at or close to the gloomiest on record as soaring energy bills add to the spiralling cost of living.
But to help budget their finances, consumers have begun their Christmas shopping early this year and many are still shopping on Black Friday.
Some consumers may, however, have other priorities, with Wales, England, the Netherlands and Poland all in action on Friday at the World Cup.
Britons will spend 8.7 billion pounds ($10.5 billion) over the Black Friday weekend (Nov. 25 to Nov. 28), according to research by GlobalData for VoucherCodes – up 0.8% year-on-year but masking a big drop in volumes once inflation is accounted for.
As of 1300 GMT, Barclaycard Payments, which processes 1 pound ($1.21) in every three pounds spent in the U.K., had seen a 0.7% increase in the volume of payments versus 2021.
“Sales volumes holding up against last year will come as welcome news for retailers against the challenging economic backdrop,” Marc Pettican, head of Barclaycard Payments, said.
This year, consumers will use Black Friday, which has become more of an online event, much more for jumping on spontaneous deals and for Christmas gifts, rather than for bigger, delayed purchases, according to consultants McKinsey.
Its research shows a quarter of U.K. consumers have already done their Christmas shopping, while about one in 10 plan to do most of it on Black Friday.
Idealo, the European price comparison portal, said 65% of online Italian shoppers are ready to buy something during the event.
In France, 70% plan to shop on Black Friday and Cyber Monday, according to research by PwC France. However, the Spanish are less keen, with just 24% of shoppers planning to take advantage of Black Friday deals, according to the Spanish Association of Mass Consumer Goods Companies.
In the United States, the National Retail Federation (NRF) has forecast holiday sales would rise at a slower pace this year, and inclement weather in some areas on Friday meant thin crowds in the early part of the day.
Amazon has forecast its slowest revenue growth for any holiday period in years and some workers at its sites in Germany and France downed tools as part of a move across the world to target the group on pay.
About 1,000 shop assistants who work at Zara and other fashion brands owned by Inditex went on strike in the retailer’s home town in northern Spain to demand better salaries.
British electricals retailer Currys said consumers were prioritizing essential domestic products like microwave ovens and energy-saving items like air fryers and heat pump tumble dryers.
“This is definitely the year of the air fryer,” chief commercial officer Ed Connolly told BBC radio.
Boots said its top performing electrical beauty item so far was the Philips Lumea hair removal device with a saving of 180 pounds.
But consumers looking for the latest iPhones could be disappointed, after Apple Inc’s warning that China’s zero-COVID policy was squeezing production at a key factory.
More than a decade since it was brought to Europe by Amazon, Black Friday’s worth to retailers still divides opinion.
Supporters say carefully planned promotions in close co-operation with global suppliers allow retailers to boost sales and maintain profit margins.
Naysayers argue the discounts suck forward Christmas sales with reduced profits and undermine consumers’ willingness to pay full price again before the festivities.
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