Black Friday is a relatively new phenomenon in the UK, having made its way across the Atlantic in 2010. Now in its sixth year, analysts are predicting that Black Friday 2016 will be the biggest day of spending yet as shoppers hit the streets and go online in the hunt for bargains.
Black Friday 2014 made headlines when shoppers took to the high street and shopping centres en masse. While this saw several billion pounds passing thorough retailers’ tills, it will also be remembered for the fights that broke out as shoppers scrambled and scrapped over the best deals.
2015 saw shoppers swap bricks for clicks, storming the internet, with a number of retailers’ websites crashing under the pressure.
On the face of it, Black Friday is good news for everyone: consumers get bargains, the retailers benefit financially and even landlords benefit through turnover rents and increases in footfall. But when you dig a little deeper, things may not be quite as good as they first seem.
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While retailers cash in on Black Friday, it is at a cost. Heavy discounting impacts gross margin. Black Friday does not increase the overall Christmas spend, but rather concentrates much of it in one day, which can cause staffing, security and other management issues.
For landlords, influxes of shoppers keep centres busy, but they can also create management headaches. There have been several instances of roads becoming congested and even gridlocked, and in the worst cases, traffic problems forcing centres to temporarily close. It is not just roads that are affected, malls themselves can become overcrowded, which raises concerns from a health and safety perspective as well as requiring crowd control measures or increased security to be deployed by landlords. The additional management required as a result of increased shopping hours and higher shopper numbers inevitably increases the service charge payable by retailers, which further impacts on gross margin.
Black Friday is no longer the busiest in-store shopping day in the US, and if the UK analysts are correct, Black Friday 2016 will see a further increase in online sales compared to in store purchases, and a marked increase in m-commerce as consumers take to their smartphones to make purchases. Only time will tell whether the frenzied in-store shopping experience will continue, or whether Black Friday and its near-neighbour Cyber Monday will merge to alleviate the potential pressures of in-store shopping.
Kirsten Partridge is a senior associate in the real estate team at CMS
