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Multiples warn over ‘unprofitable’ Black Friday

High street retailers resist temptation of deep discounting.

High street retailers have hit out at “unprofitable and unsustainable” Black Friday promotions, with many multiples saying they will hold their nerve and abstain from the event or reduce the depth of their discounts this year.

Ecommerce software provider PCA Predict has predicted record-breaking online sales for UK retailers on 25 November, up 20% to 25% on 2015.

However, separate research has shown that UK retailers increasingly feel Black Friday puts pressure on their business without boosting profits.

Two-thirds of retailers said this in 2016, compared with a third in 2015, supply chain consultancy LCP Consulting has reported. Yet Amazon has extended its Black Friday Sale period to 12 days this year, up from five in 2015.

Jigsaw chief executive Peter Ruis, has labelled the event a “deception” and said he will stick firmly to his promise not to discount outside of end-of-season Sales.

“Last year we received nothing but positive feedback on our [anti-Black Friday] manifesto from the industry and, more importantly, our customers. Black Friday warps our perception of what’s valuable and important.

“Has that product being offered at 20% off been designed to offset the price decrease? Has the supplier had pressure put on them to take the hit? We buy products for their quality and craft, and quite simply because we love them. We want them to be ethically sourced and honestly priced.”

David Reiss, founder of premium retailer Reiss, told Drapers Black Friday is damaging the industry: “We’re not doing promotions. I don’t believe in it and we’re not a promotional brand outside our specialist Sale period. [Retailers who take part] are shooting themselves in the foot.

“[Full-price sales] have been part of our philosophy all the way through and 45 years later and we’re still here, stronger than ever.”

Other retailers said they would continue to take part in the event, but it will be more targeted than in previous years.

“There will be fewer blanket promotions, less depth to promotions and more premium messaging,” said the chief operating officer of one womenswear multiple.

“We’ll see quite a lot of free delivery but on the whole there will be a lot less carnage than we’ve seen in other years. It will be interesting to see who holds their nerve,” he added.

Daniel Rubin, executive chairman of The Dune Group, said promotions will not be as deep this year as the colder weather in recent weeks has helped to clear autumn stock.

“It is a planned promotion and, although it’s part of the annual calendar now, it’s not a massive event for us. The colder weather over the last few weeks has certainly helped retailers like us with seasonal product to sell. I think promotions may have been deeper if that hadn’t happened as retailers were very worried after the warm September.”

He added: “I get the feeling [Black Friday] peaked two years ago, and now most people plan for it and buy specifically for it, so it isn’t as panicked. For us, it is about doing it tastefully so that you don’t get left behind.”

On Wednesday, Fat Face launched a price promise to reassure its customers it will not slash prices on Black Friday or in the build-up to the Christmas period. The guarantee will run until Christmas Eve.

Readers' comments (1)

  • The problem will sit with the e-tailers who sell brands as well as their own. If they have bought the product, they can create a RSP of their liking. It's the law.

    This is why brands need to carefully consider their distribution points.

    Unsuitable or offensive? Report this comment

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