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Make or break December for shops

Black Friday proves festive flop for retailers

Novelty of Black Friday may have worn off (photo by Terry Murden)


Black Friday proved a flop for Scottish retailers with sales falling in November as shoppers resisted the expected rush to the high street.

Although sales that week rose 40% – largely due to online activity – the overall figure for the month was down 0.5% in real real terms on last year. A 4.4% slump in non-food sales suggests the novelty of Black Friday has worn off.

The sluggish levels of trade will cause ripples of nervousness among retailers in the final days before Christmas, says the Scottish Retail Consortium (SRC) which is pointing to the fragile nature of the sector to warn the Finance Secretary not to hit consumers in his Budget.

The data emerged as inflation rose to a six-year high of 3.1%. The rise in the cost of living will force Mark Carney, the governor of the Bank of England, to inform Chancellor Philip Hammond how the Bank will bring inflation back to its 2% target. Average weekly wages are growing at 2.2%.

Ewan MacDonald-Russell, head of policy and external affairs at the SRC, said:Black Friday wasn’t enough to boost November’s Scottish retail sales, with figures flagging by 0.5% in real terms.

“Despite that week’s sales being 40% higher than the November average it wasn’t enough to help beleaguered high street stores match last year’s performance.

“As expected, Black Friday sales were concentrated online, with footfall figures not especially higher for the week.

“However, with Black Friday falling earlier before Christmas this year, and for many customers before payday, we haven’t seen the growth of recent years. That’s a disappointment for retailers hoping the relatively weak sales in the autumn were due to consumers waiting for the best bargains.

“Nonetheless there were a number of very strong categories this month, with electrical goods, in particular home automation items, performing strongly. Food sales continue to outperform 2016, albeit the uplift continues to be primarily driven by food price inflation, which our shop price index recorded at 1.5%.

 


“These are the final sales figures before Christmas, and they will leave Scottish retailers feeling very nervous about what is now a make-or-break December.

“With that in mind the Scottish Government need to be mindful of fragile business and consumer confidence when announcing their Budget later this week. Stiff tax rises for either is likely to hit consumer spending in the short term, and in the long term could be very harmful to the Scottish economy.”

Craig Cavin, head of retail in Scotland at KPMG which compiles the data, said:A 4.4% decline in non-food sales suggests the novelty of ‘Black Friday’ may have worn off for consumers.

“The now week-long extravaganza has perhaps left customers fatigued, with many choosing to shop online, rather than in store.

“However, while Black Friday boosted sales following a poor October – particularly in electrical goods – retailers must be careful. What started as a one day experience has turned into at least a week of sales. Scotland’s bargain hunting customers may come to expect discounted goods for much longer periods than were previously on offer which has a significant impact on retailer margins.

“On a positive note, a chilly November has seen an uptick in seasonal line sales – specifically outdoor gear and boots.

“A 4.2% growth in food sales – albeit mostly inflation driven – will also give retailers something to cheer about as they head into the final few weeks before Christmas.

“However, overall, the widening gulf between food sales and non-food sales marks a worrying trend as higher food prices mean consumers rein in discretionary spending. This week’s Scottish budget has potential to provide relief for retailers and they will be listening closely to what Derek McKay has to say on Thursday.”



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