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Fade to Black? Black Friday US sales dip while UK adopts the retail frenzy

Retail sales on Black Friday declined considerably in the US compared to last year while Amazon reported that the UK’s sales had surpassed its expectations.

The National Retail Federation (NRF) estimated on Sunday that spending over the four-day weekend would fall to $57.4bn, down 2.3% from $59.0bn in 2013. Although the number of consumers out over the Black Friday weekend has increased to 141 million from 139 million, their average spend is lower at $407, -4% on last year. Although consumer confidence in the country is at a seven year high, they remain inhibited as economic uncertainty persists. Many Retail companies launched their Thanksgiving campaigns early in mid-November, hoping to reach consumers before their spending dwindled out.

This may have prompted consumers to spread their purchases over the penultimate months of the year rather than turning out for the decadent pandemonium of Black Friday. The dip shouldn’t trouble retailers too much; some of the biggest spending days are still to come, including the last Saturday before Christmas.  The NRF forecast that November and December 2014’s combined online and offline sales would increase 4.1%to $617bn this year, the highest since 2011. The holiday season can account for between 20- 40%of retailers’ annual revenues.

Ecommerce is gaining prominence as people seek to avoid the frenzied crowds and shop online. Wal-Mart reported its second highest online sales in a day ever, behind Cyber Monday 2013 (the Monday following Black Friday), driven primarily by mobile traffic which also overwhelmed Best Buy’s servers. eBay and Amazon both saw increases of 27% and 24% respectively compared to Black Friday 2013.

In the UK, Black Friday has been a creeping phenomenon, and this year was subject to scrutiny as police were called to dozens of stores throughout the country as violent altercations broke out at midnight openings. Online, Amazon reported 5.5 million sales in a day, a 37.5% increase on the previous year. But retailer websites including John Lewis, Argos and Tesco Direct struggled to handle the increased traffic, and Currys customers waited up to an hour in a virtual queue.

This may not even be the biggest day for Amazon; Cyber Monday accumulated 4.1 million sales in 2013 compared to 4 million on Black Friday. Black Friday may also have a dampening effect on some retailers, with savvy consumers not willing to bite at full price, forcing them to keep prices low throughout the run-up to Christmas. There is more confidence in delivery and distribution systems as well, which may make shoppers order their goods later.

With the inroads made by US companies into the UK market by Amazon, eBay and Wal-Mart’s presence via Asda, this is one US export that may not be shipped back anytime soon.  It also represents an attempt to drum up sales in retailers such as Asda, Tesco and Sainsbury’s whose market share has been mercilessly devoured by the German discounters Aldi and Lidl. Wage inflation remains historically stagnant, meaning consumers will remain cautious and seeking bargains for Christmas.



Source: The Independent

Related content:

Online Retail: Global Industry Guide (MarketLine Industry Guide)

Global – Online Retail (MarketLine Industry Profile)

United Kingdom – Online Retail (MarketLine Industry Profile), Inc. (MarketLine Company Profile)

Wal-Mart Stores, Inc. (MarketLine Company Profile)

Supermarket private labels: Growth following economic downturn (MarketLine Case Studies)



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