Thursday, 28 November 2019

Not Profiting From Black Friday Sales

When i was a kid the High Street had New Years Sales in January and then these became Boxing Day Sales in December but now the shops have the Black Friday sales in November which may be good for shoppers picking up cheaper Christmas Presents, but i do wonder just how the shops benefit.
By having the sales after the busy present buying Christmas period, shoppers have to pay full price for items earning the shops the best mark up but now they sell their wares cheaper meaning less mark up and hitting their profits.
The reasoning i heard is that it gets people into the stores and they make more purchases but that is the same if they held their sales after Christmas, the shops would still be packed if it's November or January only the stores still would have had that pre-Christmas kerching.
I have noticed in town this afternoon that not all shops are even partaking on Black Friday, mostly the big names are the ones with the signs in the windows and Moody’s Investors Service has warned that 'although the sale brings forward purchases from closer to Christmas, it is at lower margins, and is therefore credit negative for the retail sector overall and rarely positive for companies' and suggests that for many retailers 'their overall profitability and brand values are better served by avoiding involvement altogether'.
So a boost in November is followed by a dent in December spending so i fail to see the lure except for the competition that if a rival is discounting, then they will have to discount also or risk losing out altogether but that hardly seems a healthy position especially as so many well known High Street names are closing their doors permanently anyway due to lack of a profit.

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