Spend during the 2017 Back Friday pre-Christmas sales bonanza is expected to hit £10.1bn, representing a 3.8% growth year-on-year, with more retailers expected to take part.
According to GlobalData the US-imported discounting period which runs from 20 November to 27 November, will account for 10.4% of total spend during the final quarter as more retailers offer deals in an attempt to make up for sluggish sales in September and October.
Eleanor Parr, retail analyst at GlobalData said: “Electrical sales are expected to continue to dominate Black Friday promotions, although year-on-year growth is forecast to slow to 3.0%, due to inflation in the market discouraging spend.”
Electricals are expected to dominate the deals but over the past two years fashion retailers such as ASOS and Topshop have improved their Black Friday offers, driving spend in this market. Health & beauty also performed well in 2016, with department stores such as House of Fraser, Selfridges and John Lewis offering strong discounts on branded fragrances and cosmetics. Strong growth is expected in this sector in 2017 if these deals are replicated.
Homewares are expected to see the strongest year-on-year growth at 5.9% as poor sales throughout the year, as consumers cut back on non-essential spend, mean more retailers in this sector will participate in the event to stimulate demand.
However strong inflation will mean that retailers will struggle to replicate the low Black Friday prices offered during 2016, says GlobalData, meaning they may turn to other incentives to encourage spending.
“This year retailers’ margins have been hit as suppliers have been forced to raise prices due to increased production costs following the devaluation of the pound. As a result, retailers have been forced to increase prices in an attempt to mitigate margin loss. This has mainly affected the electricals sector but those who trade in fashion and homewares have also been impacted,” it said.
“Increased cost prices will mean retailers are unable to offer the level of discounts advertised in 2016, meaning demand may waver as consumers feel less inclined to make bargain purchases on impulse. Therefore retailers will need to be creative with how they advertise Black Friday promotions this year, for example promoting multi-buy offers or free gifts with purchases if they cannot afford to offer large discounts,” GlobalData added.
The Black Friday sales period has gradually been lengthened since it was imported from the US. Initially it was a one-day event and then extended to the following Monday, dubbed Cyber Monday. However many retailers now lengthen it to a week to spread out demand. Amazon has already indicated that it Black Friday period will run for 10 days this year.