UK retailer Desmond & Dempsey has resisted slashing prices during the Black Friday discounting bonanza since it was founded in 2014. This year was different.
“We had a night of [deliberating] ‘do we do it, do we not’,” said Molly Goddard, who runs the burgeoning luxury pyjama brand with her husband, Joel Jeffery.
“The reason why we did it was twofold: for the first time, our change in spending and our decision-making [as a couple] . . . has become a lot harder . . . quite frankly our mortgage went up significantly.”
Goddard and other retailers are having to work harder to tempt customers as Britain’s sluggish economy and the cost of living squeeze affect people across the country.
In data shared with the FT, consultancy PwC has estimated that UK spending on presents and festivities will fall from £23bn in 2022 to £20bn this year, with more people saying they will not part with cash at all.
PwC’s autumn survey also pointed to a significant divergence in consumer confidence between the old and young, and the least and most affluent households.
“The job market, particularly among the younger consumers, is making them a little bit more nervous,” said Lisa Hooker, leader of industry for consumer markets at PwC.
For Desmond & Dempsey’s Goddard, participating in Black Friday was also a business decision. “When our [peers] are going 30, 40, 50 per cent [off] sales, we can’t not do it, it puts too many things at risk,” said Goddard, adding that she wanted to ensure the brand remained on people’s shopping lists.
The global sales event typically takes place on the Friday after Thanksgiving in the US but now stretches over several weeks as brands jostle for custom. This year it arrived amid sluggish retail sales in the UK, which in October fell to their lowest level since February 2021, according to official data.
“It’s definitely been a more challenging year,” said Anna Blackburn, the chief executive of jewellery chain Beaverbrooks. “What we’re seeing is people obviously wanting to invest in nice pieces of jewellery and watches but we’re definitely seeing a more considered purchase. Customers are paying a couple of visits to the store rather than buying the first time.”
The retailer, which trades from 85 locations in the UK, this year added more products to its Black Friday sale, which includes discounts of up to 50 per cent on engagement rings and watches, among other items.
“We’ve seen a significant increase in the reduced items that people are buying, so there’s definitely the sense that people are shopping, but they’re looking for more for their money and they are absolutely looking for bargains,” said Blackburn.
While Beaverbrooks has seen a lift in demand, consumer interest in Black Friday has dropped from 61 per cent in 2022 to 44 per cent this year, according to PwC. Only 16 per cent of people said that they would “definitely buy” something, compared with 24 per cent last year.
Almost a quarter of respondents said they were shunning the event because they were cutting back on spending, while 17 per cent said they did not have enough money to buy anything this year.
“Consumers have begun to realise they don’t get the best discounts at Black Friday,” said Ananda Roy, a senior vice-president at research firm Circana. “They’ve begun to spread out their savings.”
Other shoppers, meanwhile, have grown sceptical about Black Friday. Ellie Burnip, a 22 year-old law student from Hertfordshire, believes it is a scam. “I think if you were to really pay attention and look at the values of an item over the span of the year there’s definitely points where it’s cheaper [than on Black Friday].”
Asked if she was feeling worse off this Christmas compared with last year, Burnip said: “Oh, definitely. Not many people will be getting presents from me.”
But there are some reasons to be cheerful. A closely watched UK consumer confidence survey registered a bounce back in sentiment in November despite ongoing concerns about the cost of living.
The GfK index — a measure of how Britons view their personal finances and broader economic prospects — increased six points from minus 30 in October to minus 24.
Analysts also pointed out that some categories and brands will perform better than others in the run-up to Christmas. Predictions this month from consultancy McKinsey showed that as inflation slows, consumers shift more of their shopping towards food. Grocers are among shoppers’ top three destinations for both Black Friday and Christmas, after apparel and fashion but ahead of electronics and beauty.
Online-only retailers that offered “a breadth of deals and of categories” would remain “the number one destination that consumers expect to use”, said Samantha Phillips, a partner at McKinsey.
Eve Williams, general manager at eBay UK, said this year shoppers were savvier than before. “People are selling [their] items in order to get money to spend on their Christmas gifts,” she said.
eBay has convinced more brands such as Ninja, which sells appliances including air fryers, to join companies including Dyson and Hotel Chocolat in offering refurbished items on the online platform.
“Some of these big name brands are often at the top of people’s Christmas lists. That’s the point that we’re trying to make,” said Williams. “We’re not judging people for buying new, we’re just reminding them that actually by making a choice to buy second-hand they can get the same quality . . . but at a more affordable price.”