Daily Management Review

As October Retail Sales Slump in the UK, Asda Pulls Out of Black Friday and Others May Follow


As October Retail Sales Slump in the UK, Asda Pulls Out of Black Friday and Others May Follow
Despite the UK government the event of Black Friday introduced two years ago, UK retailer Asda has confirmed it will “step away” from taking part in the event. Analysts say that the looming discount phenomenon of Black Friday affecting the retail sector is the reason behind this announcement.
Rather than splurging on the flash sales event it will instead invest £26m in savings across the festive shopping period, said Asda communiqué, whose parent Walmart is a big Black Friday player in the US.
The supermarket claimed "shopper fatigue" was causing a drag around one-off sales on big-ticket, non-essential items at Christmas.
"The decision to step away from Black Friday is not about the event itself," said Asda chief executive Andy Clarke.
"Over the last two years we've developed an organised, well-executed plan, but this year customers have told us loud and clear that they don't want to be held hostage to a day or two of sales," he added.
Half-price toys, cheap skincare products and perfume, computer games consoles, televisions and reductions on beef, salmon, wine and spirits are rhe areas where Asda would invest in, said the company. 
There were reports in the media last week that Asda was contemplating shying away from the Black Friday event partly due to the embarrassment of the chaos in the stores last year, where police had to be called on some instances apart from being averse from spilling money on untimely offers.
Consumers and retailers held out for the Black Friday blowout and this was the reason that the wider UK retail sales had been hit in October according to data that was published on Tuesday.
It had been forecast that Black Friday 2015 will become the UK’s single shopping day in the UK to hit £1 billion in sales, after £810 million was spent on 2014. However experts anticipate that there would be others who would follow Asda as companies like AO World and John Lewis have also expressed objection to the event.
Last month, Argos owner Home Retail Group said that due to trading uncertainty caused by Black Friday the full year trading of the company would fall short of the projections.
Rather than increasing overall spending in the last few months of the year, several retailers felt last year’s very strong Black Friday sales saw shoppers merely bringing forward end-of-year purchases.
According to BDO, with retailers margins also under pressure as they felt forced to continue discounting, high street sales in fact fell last Christmas.
Data from the Office for National Statistics showed that retail sales volumes rose 1.5% month-on-month and 6.7% year-on-year in November 2014, but were up a lesser 0.6% month-on-month and 4.2% year-on-year in December and this made economists like Howard Archer of IHS Global Insight to note an apparent lull in retail sales in 2014. Archer wondered whether UK retailers will match or even surpass the substantial discounting that took place last year.
“Or will retailers decide that less aggressive is needed this year due to consumers’ improved purchasing power and relatively high confidence? Obviously the more discounting that the retailers do, the more it eats into their profit margins,” he added.
It is estimated that internet sales on Cyber Monday, the online cousin that rounds off Black Friday weekend, will grow 31% to £943 million, while online shopping on Boxing Day will rise 22% to £856 million, according to forecasts from Experian-IMRG.