It's Black Friday - what will it do for the retail sector?
It’s rare for the retail industry to be hit by so many headwinds at once, as it deals with wage and commodity inflation, supply shortages (even if easing) exchange rates, energy costs and inflation. But despite all this, and the cost-of-living crisis, interest in Black Friday has held up.
‘‘Consumers already told us that they do expect to spend more over Black Friday - by half a billion pounds compared with last year. The question is whether this momentum will last up till the end of the year.’’
said Lisa Hooker, our Consumer Markets Leader
Our annual Black Friday research gives a glimpse into how shoppers are kicking off the festive rush for retail. Find out more here.?
1 in 4 consumers set to spend on Black Friday despite economic downturn
We estimate the average spend per consumer to be around ￡238 which will add ￡500 million to the retail economy this year taking the overall spend on Black Friday bargains to ￡7.5billion.
Kien Tan, our Retail Director adds:
“Interest in Black Friday is highest amongst under 25s with 9 out of 10 Gen Z’ers saying they’ll be looking for a bargain, and three-quarters of them planning to buy a treat for themselves.”
The Autumn Consumer Sentiment
Despite the good news around Black Friday, our most recent consumer sentiment survey found that one in eight adults is either missing bills and loan repayments or in danger of doing so, and that almost half of households have already cut back on energy usage in the last three months.
Consumers are looking for value in their purchases - a trend we expect to see more of as we launch into the busy festive gifting period. This should provide some much-needed buzz in our cities where people will shop, meet and look for experiences.
Angus Johnson, Mark Addley and Lisa Hooker discussed this, and more, on our recent LinkedIn Live series, Return to the City.
What's happening on the high street?
In the latest store openings & closures report we’ve noticed a slowdown in closures with 34 a day (opposed to 61 a day in 2020). These closures included many banks and charity shops where these services continue to be digitised via apps and e-commerce. We saw 21 new stores open each day with lots of new restaurants and takeaways taking up empty retail space.
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The cost-of-living crisis
Each month, we respond to the ONS Consumer Price Inflation and Retail Sales data that allows us to take a closer look at where consumers are spending, by category. The latest results show a sign of how the country is responding to the current pressures:
You can read our comments on October 2022 CPI figures here.
Lisa Hooker, our Consumer Markets Leader comments:
“With the country facing the biggest decline in real disposable income since the end of World War II, and continued cost headwinds in the form of higher energy and input costs and National Living Wage increases, there is no question that the retail sector will face unprecedented challenges in 2023.’’
Hotels Forecast
Our Hotels Forecast was published earlier this month. Despite rapid growth and a stronger than expected rebound in demand in 2022, recovery in the UK hotel market is set to stall in 2023 in the face of continued volatility of trading conditions and rising operational costs. But, as our Hotels Forecast 2022-2023 reveals, there are diverging fortunes for hotels in London and those in the UK regions.?
“With a laser focus on cost optimisation and the right investment strategies, I believe hotels across the UK can weather this latest disruption, emerging stronger and more resilient for the future.”
said Samantha Ward, our UK Hotels Leader
What’s next?
We’re looking forward to Christmas predictions and promotions in December. Check back on 1st Dec to see the full Festive Predictions report including how consumers plan to spend this season.