Black Friday is presented as a day in heaven for bargain-hunters but the reality of the biggest shopping event of the year is often more prosaic. Crowded stores, unplanned purchases, and lacklustre deals might well make it the worst day of the year to shop. But experts have good news for shoppers this festive season: the prices are likely to fall even further towards December resulting in better deals. Here are their arguments explained.
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Companies are well-stocked up - great news for consumers
Companies, worried about a repeat of last year's shortages, built up rich stocks of clothes, toys and other supplies ahead of the holidays.
Now they are knocking down prices, worried that they overestimated demand from buyers facing strains from the rising cost of living.
Sales events have already been running for weeks - and analysts say the discounts could get deeper as Christmas Day approaches, and firms face pressure to get goods off their shelves.
Dana Telsey, executive of a firm focused on the consumer sector, said:
This year there's too much inventory and there's a magnitude of promotions that will continue to increase as we get closer to Christmas. It's great news for consumers - if they have the money to spend.
The cost of living crisis creates less demand and drives promotions
A survey by consulting group BCG of nine countries, including the UK, Australia, France and Germany, found that the US was the only country where shoppers planned to spend more this year than last. European countries see a different mood, impacted by higher energy and food costs.
That aligns with gloomy forecasts from global retailers like Amazon, which has warned that holiday sales are likely to be weak, especially in its international business.
That is putting a damper on sales expectations for retailers. The fewer people buy, the less cash businesses end up with, with the unfavourable situation forcing them to drive further promotions in an effort to boost their revenues and stay afloat.
Black Friday is different this year
Black Friday has seen its hold on the shopping season loosen in recent years as online discounts are applied earlier and earlier. This year, many buyers have already made purchases, tempted by sales events that started as early as October.
The rise of early shopping raises the risk that buyer demand will drop off sharply in December, and if that happens, even deeper discounts are likely to follow.
But experts believe that despite the deals, consumers may still not be celebrating much, given the massive jumps in prices that have hit wallets over the last two years. Sales are always nice but they don’t offset the overall financial impact of the cost of living crisis.
Sources used:
- BBC News: 'Black Friday deals: Why bigger discounts may come next month'
