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Black Friday fails to cut it for independent retailers

Black Friday fails to cut it for independent retailers

Black Friday, sale, shopping

The Black Friday sales blitz has been labelled a flop for independent Aussie retailers, with in-store spending falling by 13 per cent compared with last year.

Transaction figures from the pre-Christmas sales bonanza, by retail management platform Vend, revealed that discounting levels were down by a similar margin (12 per cent) in 2018. That was based on analysis of customer transaction data from a sample of 3,000 retailers.

Vend attributed the disappointing year-on-year result to the intense cost pressures facing smaller retailers, which are increasingly unable to provide sizeable discounts that eat into already thin margins. This has left many to refrain from participating in the campaign altogether.

“There have been reports that [the] Black Friday weekend has now become the biggest trading period of the year. This may well be true for big-box stores and major online retailers, but our data shows this doesn’t necessarily translate for smaller businesses,” the company’s APAC country manager, Dave Scheine, said.

“Shoppers have still been splashing the cash — or credit — over Black Friday this year, but they need to also be mindful to support local, alongside looking for online and big-box deals.

“It’s notoriously hard for independent retailers to compete on price, although many are still doing this. For example, over the weekend, home and lifestyle stores ramped up their discounting by over 200 per cent.”

Steeper discounts drive bigger sales growth

Shoppers appear reluctant to part with their cash unless there is a sizeable price discount incentivising them to do so.

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This year’s Black Friday, despite delivering poorer results than in 2017, still saw spending rise by 12 per cent compared with previous weeks in October and November, according to Vend.

On a sector-by-sector breakdown, those that increased their level of discounting for Black Friday saw the greatest increase in sales compared to an average shopping week.

The home, lifestyle and gifts sector had to invest in a 240 per cent increase in price discounts to deliver a 21 per cent sales increase over the Black Friday period.

Meanwhile, health and beauty saw an 18 per cent sales rise on a 38 per cent discounting increase, and fashion and apparel sales rose by 17 per cent on the back of a 60 per cent discounting increase.

It wasn’t a good result for all sectors though.

The data shows that despite increasing price discounting rates by 56 per cent this year, the specialty food and drink sector saw no change at all in sales volumes.

Sports, hobbies and toy retailers fared even worse, where sales actually fell by 7 per cent over the Black Friday period, despite having boosted price discounting by 17 per cent.

Which cities see the most value from Black Friday?

According to Vend, Black Friday 2018 delivered the following results across these major Australian cities when compared with an average shopping week:

  • Adelaide: sales rose by 8 per cent
  • Sydney: sales rose by 6 per cent
  • Melbourne: sales rose by 4 per cent
  • Gold Coast: sales rose by 4 per cent
  • Brisbane: sales rose by 3 per cent
  • Perth: no change in sales volumes
  • Canberra: sales fell by 2 per cent

What is Black Friday?

Black Friday is an annual sales frenzy that began in the US and occurs on the first Friday after the Thanksgiving holiday (which is observed on the fourth Thursday of November).

It marks the start of the annual Christmas shopping season.

The popularity of the sales campaign has seen it spread to other countries, including Australia, in recent years.

Black Friday fails to cut it for independent retailers
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