The cost of living crisis casts a shadow over Black Friday in Europe

By James Davey

LONDON (Reuters) – European retailers are hoping the Black Friday discount day will drive shoppers to splurge, although it comes against a backdrop of a worsening cost-of-living crisis and the distraction of the Football World Cup.

Retailers across Europe fear the overall Christmas season could be the worst in at least a decade as shoppers cut back, while the cost of doing business shows no signs of abating, putting pressure on profit margins.

Double-digit inflation has eroded consumers’ purchasing power and their confidence is also at or close to the gloomiest on record as rising utility bills add to the rapidly rising cost of living.

But to help budget their finances, consumers started their holiday shopping early this year, and many still seem ready to shop on Black Friday.

Some consumers may have other priorities as Wales, England, the Netherlands and Poland all play at the World Cup on Friday.

Britons will spend £8.7 billion ($10.5 billion) over the Black Friday weekend (November 25 to November 28), according to research from GlobalData for VoucherCodes — a 0.8% year-on-year increase but masking a major fall in volumes once inflation is factored in.

This year, according to consultant McKinsey, consumers will use Black Friday, which has become more of an online event, much more to jump on spontaneous deals and holiday gifts than for larger, postponed purchases.

The survey shows that a quarter of UK consumers have already done some Christmas shopping, with around one in ten planning to do most of their shopping on Black Friday.

Idealo, the European price comparison portal, said 65% of Italian online shoppers are ready to purchase a product at the event.

In France, 70% plan to shop on Black Friday and Cyber ​​Monday, according to research from PwC France.

Spaniards are less enthusiastic, however, with just 24% of shoppers planning to take advantage of Black Friday deals to get a head start on their Christmas shopping, according to the Spanish Association of Mass Consumer Goods Companies.

In the United States, the National Retail Federation (NRF) has forecast holiday sales to increase at a slower pace this year, while Amazon has forecast the slowest holiday sales growth in years.

AIR FRRYERS

In Britain, the Black Friday trading period is particularly important for department store group John Lewis, consumer electronics retailers Currys and AO World, and retail chain Argos, which is part of supermarket group Sainsbury’s.

“We are seeing a significant change in behaviour, we are seeing people prioritizing things like essential household products… things like microwave ovens, air fryers,” Currys chief commercial officer Ed Connolly told BBC radio, noting that there there was strong demand for other energy sources. savings products such as tumble dryers with heat pump.

Some major retailers, including Marks & Spencer, largely eschew the event.

More than a decade after it was brought to Europe by Amazon, opinions on Black Friday are still divided on the value of Black Friday for retailers.

Proponents say carefully planned promotions in close collaboration with global suppliers enable retailers to boost sales and maintain profit margins.

Opponents argue that the discounts are sucking Christmas sales forward with lower profits and undermining consumers’ willingness to pay full price again before the festivities.

($1 = 0.8273 pounds)

(Reporting by James Davey in London; Additional reporting by Giselda Vagnoni in Rome, Dominque Vidalon in Paris and Corina Rodriguez in Madrid; Editing by David Holmes and Kim Coghill)

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