Black Friday spending set to fall to £1.7bn as cost of living bites
Consumers will cut back during Black Friday sales with spending expected to dip 15% to £1.7bn as the cost of living crisis forces UK households to cut back.
Shoppers will spend an estimated £177 on average, a sharp decline from previous Black Fridays, where consumers would spend well above the £200 mark, according to new research from Retail Economics and HotUKDeals.
The most affluent households are expected to spend around 13% more than the average, as they look to bring forward Christmas purchases to take advantage of discounts given inflation.
But the least affluent expect to spend 9% less than average, focusing more heavily on essentials.
While Black Friday on 25 November will remain a predominantly online event, with two-thirds of spending, equating to around £1.2bn, projected to be generated online, shoppers wanting to bargain hunt are expected to hit the high streets.
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Low-affluence shoppers are twice as likely to shop exclusively in-store this Black Friday, compared to more affluent shoppers, as they look to manage spending with cash and search for local markdowns.
“With household finances under so much pressure, consumers will be looking to take advantage of these discounts, but with budgets stretched to breaking, they will be more thoughtful in their approach, interrogating the veracity of deals on offer more than ever before and doing their research before being drawn into impulse spending,” Vix Leyton, consumer expert of HotUKDeals, said.
“There will also be many shoppers looking to spread the cost over as long a period as possible, so Black Friday still represents a big opportunity to retailers who are strategic and canny.”
For the first time in its 92-year history, the FIFA World Cup will be kicking off much later than usual with the first game being played on 20 November, just five days before Black Friday. This is expected to boost sales in food, electricals and apparel as people gather to watch the matches, giving an additional £269m boost to overall Black Friday spending.
Around one in five (21.2%) Black Friday shoppers anticipate they will spend more during the promotional period this year compared to last year as a direct result of the World Cup.
“It’s almost inevitable that Black Friday will be a more muted affair this year as families struggle to make ends meet. The backdrop of rising inflation, escalating interest rates and softer consumer confidence suggests consumers will be holding back their spending as they focus on essentials,” Richard Lim, CEO of Retail Economics, said.
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Meanwhile, footfall took a stumble in its slow return to pre-pandemic levels as rising prices and tightening purse strings meant fewer consumers made trips to the shops, according to British Retail Consortium (BRC)-Sensormatic IQ data.
Total UK footfall was down 11.8% on October three years ago – a comparison to iron out pandemic discrepancies – two percentage points worse than October 2019.
High Street footfall was down 11.6%, although this was 0.3 percentage points better than last month’s rate and an improvement on the three-month average decline of 11.9%.
Retail park visits were down 3.7% while shopping centres saw 21.8% fewer visitors than October 2019.
England again saw the shallowest footfall decline of all regions at 11.4%, followed by Scotland at 12% and Northern Ireland at 13.1%.
Wales saw the steepest decline at 16.1%.