Retailers face ‘Bleak Friday’ as cost of living crisis hit spending – business live | Business

Key eventsIntroduction: Black Friday could be bleak if consumers cut backGood morning, and welcome to our rolling coverage of business, the financial markets and the world economy.The stakes are high for retailers today, as they try to tempt shoppers to spend with a flurry of Black Friday offers.But they could face a “Bleak Friday” this year, economists say, as the cost of living crisis means consumers will resist discounts on new electronics kit, homeware, clothing and the like. Plus, ongoing strikes at Royal Mail could deter people from shopping online.Black Friday, originally an American post-Thanksgiving wheeze, is now more of an global event – thanks to international retailers looking to kick-start the festive rush.These days, ‘Black Friday’ deals often last at least a week – running into the pre-Christmas offers, and then the January sales. But some of the offers may not be as generous as they look (and may get more generous once retailers get desperate to shift stock).The CEBR thinktank reckons we could see a “Bleak Friday”, with discounts unlikely to save struggling retailers as UK consumers cut back spending by an estimated £1.5bn in the last quarter of this year.The CEBR say:The cost-of-living crisis, combined with warnings that discounts are often more generous at other times of year and the threat of a Royal Mail strike, will mean that it is a weak year for Black Friday sales and we may see January sales start early in an attempt to shift stock.Black Friday can also suck in spending that would have happened anyway, either before or after the big day/week. This year, people simply have less disposable income to spend at all, with surveys showing many households are cutting back on spending.The CEBR says:While 42% of Brits have reported shopping around more due to the rising cost of living, suggesting they are looking for discounts, a higher share, 65%, reported they are spending less on non-essentials due to these cost pressures.It’s the first Black Friday without Covid restrictions since 2019, which ought to help retailers get customers into shops. But sales and profits could still be lower than 2021.As Danni Hewson, AJ Bell financial analyst, put it:“Friday should be one of the busiest days for UK retailers but concerns about constrained budgets and the added issue of a strike by Royal Mail workers are both expected to make the affair a rather damp squib.Retail expert Richard Lim told the BBC he was expecting Black Friday to be a more “muted affair” with sales down on last year.Lim said:“Inevitably, I think what we’re going to see is consumers being much more careful with their spending.”Also coming up todayRetail giant Amazon faces a wave of Black Friday protests and strikes, as workers stage walkouts over pay and conditions (more on that shortly).AMAZON FACES BLACK FRIDAY PROTESTS, STRIKES IN 40 COUNTRIES; WORKERS PLAN TO STAGE WALKOUTS OVER PAY AND CONDITIONS: BBG— FXHedge (@Fxhedgers) November 25, 2022
Royal Mail staff will be picketing outside the postal groups offices again today, in an ongoing dispute over pay. Eight more days of action are planned in the run-up to Christmas.The UK’s wave of industrial action has deepened, with nurses announcing they will strike for two days next month.Royal College of Nursing members will stage national strikes – the first in its 106-year history – on 15 and 20 December, with action expected to last for 12 hours on both days.The unprecedented industrial action will seriously disrupt care and is likely to be the first in a series of strikes over the winter and into the spring by NHS staff, including junior doctors and ambulance workers.European financial markets could be subdued, with Wall Street reopening for a half-day after Thursday’s holiday.The agenda
7am GMT: Germany’s Q3 GDP report (final estimate)
7.45am GMT: French consumer confidence report
9.30am GMT: Latest UK public opinions and social trends report
Noon GMT: Mexico’s Q3 GDP report

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