Black Friday delivers 'body blow' to Britain's Covid-hammered high street

Physical stores struggling with effects of lockdown are closed for the discount event

Black Friday will be another “body blow” for Britain’s Covid-19-hit high street, say analysts, because stores cannot open to cash in on the US-inspired discount event.

The retail sales day, which arrived in the UK in 2013, started out as an online event that has since filtered into physical stores, but with the majority of the UK still in lockdown, brick-and-mortar stores cannot take advantage.

“Being closed while Black Friday is on during this latest lockdown is a body blow for the high street, because it’s just another reason for consumers to shop online,” said Andrew Goodacre, chief executive of the British Independent Retailers Association.

“November and December are the two biggest business months in retail and if people intend to shop early for Christmas, then Black Friday could really hurt.”

While most independent retailers have an online presence as well a physical store, Mr Goodacre said this is to supplement shops, not to replace them.

“A retailer that has moved online or has an online presence alongside a shop would not be selling as much online as they would have done through the shop, and they very much need that shop to still be functioning.”

A delivery man walks in the rain past Black Friday offers in a shop in central London on November 20, 2020, as life under a second lockdown continues in England.  The current lockdown in England has shuttered restaurants, gyms and non-essential shops and services until December 2, with hopes business could resume in time for Christmas. / AFP / Tolga Akmen

While non-essential shops can reopen on December 3, according to Prime Minister Boris Johnson, Black Friday takes place on November 27, before the restrictions are lifted.

For William Coe, the owner of Coes, a chain of six fashion stores in East Anglia, the timing of Black Friday is another hit to his brand.

Of his six stores, only one in Ipswich is open for a click-and-collect service, with the rest closed and 90 per cent of his staff furloughed.

He has unveiled an “aggressive” 20 per cent discount across his online site for Black Friday but says he will be “fortunate” to generate 20 per cent of the sales he normally does this month. This is because 90 per cent of his sales come through the physical stores and 10 per cent online.

“We took the decision to have a slightly more aggressive Black Friday because we have been shut for the last three weeks. We have that amount of stock that we need to liquidate … and there’s the harsh reality that we need to generate some cash,” he said.

For physical stores that do have an online presence, competing against the larger bands is a challenge because they often cannot afford decent SEO to place them high enough on a Google search, said Mr Goodacre.

“If you’re searching for a pair of trainers or a television, you type the product in and it will pop up but the small players won’t even appear on page one of your search,” he said.

“People search by product as opposed to by shop, so if you’re looking for Christmas presents, such as a black handbag, you’ll let Google tell you where it is, so online is not the answer for these stores. Black Friday is very damaging, even more so now, because 80 per cent of independent retailers are closed at the moment.”

A man walks past a boarded up shop in central London on November 20, 2020, as life under a second lockdown continues in England.  The current lockdown in England has shuttered restaurants, gyms and non-essential shops and services until December 2, with hopes business could resume in time for Christmas. / AFP / Tolga Akmen

UK retail sales rebounded for the sixth consecutive month in October, rising 1.2 per cent on the month as consumers brought their Christmas shopping forward. However, the slow recovery in clothing sales stalled after five consecutive months of increased sales, with analysts expecting online sales to rise again in November but overall retail sales to fall.

Tom Holder of the British Retail Consortium said it is a “very hard time” for physical retailers with the BRC estimating that non-essential retailers have lost £2 billion ($2.67bn) in sales over the course of the lockdown,

“This lockdown will sadly cost some jobs and shops. It is something which has been very destructive for those retailers,” he said.

Before lockdowns in England and Wales were implemented, Black Friday spending was estimated to increase by 8 per cent this year from £7.8bn to £8.4bn, according to consultancy PwC.

However, after the second lockdowns were rolled out, PwC updated its consumer research and found that interest in Black Friday had tumbled from 51 per cent to 38 per cent.

”This means that we now expect spending in this year’s Black Friday sales to fall to £6.2bn - a 20 per cent decline versus last year,” said PwC.

Mr Holder said it is hard to predict how the sales event will fare as it comes close to pay day and Christmas.

“Many consumers indeed have actually been saving and spending less over the last few months, which may mean they have a little more to spend,” he said.

“But there are many other people who have been hit by the financial woes caused by Covid and it will be some time before we can work out whether this will be the biggest Black Friday on record.”

That’s little comfort for Mr Coe, who says the effects of being shut this month won’t just hit hard during Black Friday week but also into next year.

In France, the government made supermarket chains and e-commerce platforms like Amazon agree to postpone “Black Friday” promotions, responding to concerns that shops shut by the nation's coronavirus lockdown were haemorrhaging business and could be hurt further if they missed out on the consumer splurge.

COVENTRY, ENGLAND - NOVEMBER 23: People walk through a shopping centre on November 23, 2020 in Coventry, England. Coventry won a quadrennial competition held by Britain's Department of Digital, Culture, Media & Sport to celebrate a city's cultural scene, highlighting its music, dance and theatrical events. Thankfully, Coventry's year in the spotlight begins May 2021, when the UK -- and much of the rest of the world -- hopes to have seen the live-events industry fully rebound from the covid-19 pandemic. Previous winners of the competition are Derry/Londonderry in 2013 and Hull in 2017. (Photo by Christopher Furlong/Getty Images)

Under the deal brokered by the economy minister, Bruno Le Maire, the event has now been pushed back by a week to December 4, with the understanding that lockdown-affected businesses will have been allowed to reopen by then.

Mr Goodacre says a similar initiative should have been considered in the UK because 20 per cent of independent retailers did not re-open in the summer after the first lockdown.

Mr Holder said the BRC is still waiting to hear whether the government will extend business rates relief after April next year to ensure retailers aren't hit with an £8bn bill in April.

"We also hope that the government will extend the rent moratorium to give landlords and tenants more time to negotiate and bring rents more in line with where the market is at the moment," he said.

For fashion retailers like Mr Coe, revenue has been doubly hit by people not attending weddings, events or Christmas parties. The store owner also fears that uncertainty has driven many consumers to complete their Christmas shopping early.

“We had a lot of early shoppers pre-lockdown, so I think there is a risk some of it will be lost during lockdown, especially because there will be some quite aggressive offers this week,” he said.

“On the other hand, I think it will be a challenging Christmas anyway, because of the state of the economy. You know, people will be I'm sure scaling down slightly their purchases. So it’s a double whammy in that sense.”

But some consumers are fighting back and following retail association campaigns to "buy local" this Christmas, to save their local high street and avoid doing all their Christmas spending on Amazon on Black Friday.

"Spending money locally is actually better for your local economy because it gets recycled locally too," said Mr Goodacre.

Ilona Taillade, the co-founder of Six and Sons in Amsterdam, said her sustainable lifestyle store is making a stand against Black Friday by running a "Green Friday" campaign.

The consignment store, which is a platform for more than 70 sustainable brands to trade their wares, is still open as the Netherlands is only in partial lockdown with stores able to decide for themselves whether to stay open or not.

"We don't own the stock and Black Friday is really about clearing stock in order to make room for new stock. That's the whole point of Black Friday and we see that as consumerism gone haywire because if you think about sustainability, you don't want people to overspend or overbuy, because that means there's waste," said Ms Taillade.

"We will decorate the store front in green and socially we will talk about green Friday, but it's definitely not about reducing prices in order for people to buy more."

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