Black Friday spend to surpass £10bn

Black Friday spend is expected to reach £10.1 billion this year, a growth of 3.8 per cent on 2016, according to the latest figures from GlobalData.

The Black Friday period, defined as from November 20 to November 27, is estimated to account for 10.4 per cent of the total spend in the fourth quarter.

Despite a forecast slowdown in growth year on year, GlobalData said it expected more retailers to participate in the event this year in an attempt to “stimulate the waning demand” they faced over September and October.

Electricals have traditionally been the main the focus of the event and are expected to continue to lead.

Eleanor Parr, retail analyst at GlobalData, commented: “Electrical sales are expected to continue to dominate Black Friday promotions, although year-on-year growth is forecast to slow to three per cent, due to inflation in the market discouraging spend.”

Strong inflation in the market means retailers will struggle to offer the same level of discounts seen in 2016, which GlobalData claimed could see consumer demand waver as users feel less inclined to make bargain purchases on impulse.

With retailers’ margins being hit by increased prices from suppliers, dealers have been forced to raise prices in an attempt to mitigate margin loss, with the majority of these increases affecting the electrical sector.

GlobalData claimed that retailers would need to be creative with how they advertise Black Friday promotions this year, such as multi-buy offers or free gifts with purchases.

A lower proportion of the Black Friday spend is forecast for the Friday itself, with the event in the UK developing over the years to cover a longer time-frame, both to encourage more consumers to participate, as well as to relieve operational pressures.

In 2016, the majority of retailers advertised their Black Friday starting on the Friday and finishing on Cyber Monday.

However, Amazon took this further, advertising a sale that ran for 12 days from November 14-25 and has already highlighted that its sales would run for a total of 10 days this year.

This year, GlobalData anticipates that more retailers will extend their promotional calendar to include the whole week before Black Friday in an attempt to stimulate demand as they continue to struggle in this quarter.

It also argued that other players would be forced to participate in Black Friday in order to remain competitive.

However, it advised retailers to ensure they had the operational capacities to cope with an influx in trade over a sustained period.