Confessions from the City: The retail analyst

‘Retailers do not have guns pointed at their head  forcing them to participate in this charade’
Scenes of chaos at Asda in Wembley last year
PA
27 November 2015
WEST END FINAL

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Black Friday — much like crack cocaine and films starring Will Ferrell — is a ghastly import from America.

Retailers from Tesco, Amazon and Currys all the way through to, ridiculously, Ann Summers, will today prise open their doors and revamp their websites in the hope that a veritable array of TVs, sandwich toasters and pulsating dildos will entice throngs of bargain hunters to get the tills ringing louder than the bells of St Paul’s.

Its impact on retailers themselves is the source of great debate. For some — the ones I’ve seen with more crags on their face than Mount Rushmore of late — it is massively disruptive, costly and simply delays demand or brings it forward from Christmas. It forces them to sell whatever crap they had out back gathering dust in the stockroom at vastly deflated prices, leaving their meagre margins leaner than stringy wafer thin ham.

At the same time, some notoriously creaky supply chains and delivery operations will be thrown into an utter vortex of pure chaos. Add in the unedifying footage of people chinning each other over some cut-price hair straighteners, and you have a PR disaster on your hands too. Lovely.

But over the past few weeks, I’ve been speaking to plenty of retailers who are actually looking forward to today. They’ve not done the knee-jerk thing of ringing up suppliers with a couple of months to go and hammering them on price — but called up the biggest brands and asked “how are we going to play this”, and worked out what stock to get in. Plenty of them have ploughed cash into more stock, van drivers and geeks behind the scenes to make sure shoppers aren’t staring at 404 error pages. These are the ones who won’t be whining about Black Friday as they issue a profit warning alongside their trading updates in January.

There’s lots of talk about whether or not the “genie can be put back into the bottle” and Black Friday be cancelled in the UK in future. I reckon it can. Retailers do not have guns pointed at their head forcing them to participate in this charade. Asda will not lose out by stepping back from Black Friday this year. Instead, they’ll look on as their competitors suffer from organisational expense and complexity. Some retailers will plough on, others stick with it.

Research suggests that more than half of shoppers aren’t that bothered either way, so my bet’s on 2016 as the year this self-inflicted pandemonium grinds to a crunching halt.

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