Many shoppers say they plan to spend less this Black Friday as the cost of living crisis hits.
Richard Baker | In pictures | Getty Images
Black Friday may offer a chance to grab a bargain ahead of the holiday season, but many shoppers expect retailers to slash prices by a bigger margin this year as they tighten their belts in a context of worsening cost of living crisis.
Shoppers in Europe plan to spend nearly a fifth less during this year’s annual discount period as inflationary pressures weigh on consumer sentiment, according to Boston Consulting Group research this month.
UK consumers are expected to cut spending by the largest margin in the region, spending 18% less, while those in France and Germany both plan to cut spending by 15% and Spain by 13%.
American consumers were the only ones in the survey of nine countries, including Australia, to say they expected to spend more this year, increasing their spending by 6%.
The results come as the global economic outlook darkens, particularly in Europe, where Russia’s invasion of Ukraine has weighed on growth and sent energy prices soaring.
The UK is already in recessionthe country’s Independent Office for Budget Accountability confirmed last week.
This is increasing pressure on retailers, who are already struggling to recover from a Covid-19 downturn and attract increasingly cost-conscious consumers. In the meantime, many companies, seeking to correct last year’s shortcomings and supply problems, have built up large stocks of inventory which they are now under pressure to move.
“Black Friday is a vital time in the shopping calendar for physical and online retailers who are still recovering from the Covid pandemic and are now faced with consumers in many markets reducing their spending plans on many non-essential items. “, Jessica Distler, BCG’s chief executive and partner, said in the report.
This could see retailers extend their discounts throughout the month, increasing shopping opportunities for consumers with the cash to spend.
Transactions in the UK grew by 3.8% a year in the week to Black Friday, according to new data from Barclays Payments, one of the country’s leading payment processors.
Kristy Morris, managing director of business solutions at Barclays Payments, told CNBC on Thursday that this could mean shoppers are more inclined to spread out their purchases during the Christmas season.
“What we’ve seen is the spread of the Black Friday trend. We’ve seen it spread throughout the week and even further into the month,” Morris said.
“Part of that is about potentially bringing some of those Christmas shopping forward and consumers thinking about being more savvy about how they might be spending on Christmas,” she added.
Still, experts have urged shoppers to tread carefully when looking to take advantage of discounts this festive season.
John Davis, UK and Ireland director of cybersecurity organization Sans Institute, said online hackers have been known to “turn up the heat” during discount periods, particularly when shoppers are under pressure to make a deal.
Indeed, shopping scams increased by 34% after last year’s Black Friday and Cyber Monday weekend, according to Barclays research.
“Cybercriminals are advancing with attacks that are more frequent, more sophisticated and harder to detect than ever before,” he said.
Davis urged consumers to be extremely vigilant when shopping online and to avoid making hasty or panicky decisions for “fear of missing out.”
“Opportunistic hackers will try to create a false sense of urgency, so it’s important to exercise caution by staying aware of scams, trusting instincts and reinforcing security in all of our online behaviors,” he said. he added.
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