Retail Ireland, the Ibec group that represents the retail sector, today said that retailers are preparing for a busy Black Friday weekend as consumers flock to stores all over the country in search of bargains to kick start their Christmas shopping. The initiative, which originated in the United States to mark the start of the Christmas shopping season after Thanksgiving, has been an important feature in the Irish retail promotional cycle during recent years, but evidence would suggest that the event has had a distortive effect on the trade and its benefits are now being openly questioned by retailers.
Retail Ireland Director Thomas Burke said: "This weekend signals the beginning of the festive shopping period for many, and in recent years Black Friday has embedded itself as a key shopping event for Irish consumers. However, while the deep discounting and heavy promotional activity is certainly good news for Irish consumers, it does present a challenge for many retailers who have seen an erosion in their competitive position in recent months as a result of a growing inputs costs in areas such as labour, insurance, local authority rates and rents.”
“Consumers are now expecting deep discounts of as much as 50% on a wide range of products. But retailers are increasingly reluctant to engage in such deep discounting for fear that they are merely displaying sales that would otherwise happen later in the Christmas shopping period at more normal price levels.“
“This was the case in 2017 when we saw retail sales fall by 2.6% in December when compared to the previous month, a sign that a significant portion of the traditional Christmas purchases were brought forward into November as consumers availed of deep discounts. In the current environment with the economy expected to grow by up to 9% this year and consumer disposable income growing by 4.4%, retailers are increasingly reluctant to give away margin.
"However, while some retailers now view the event with suspicion and an element of dread, others continue to embrace the promotional window with retail categories such as electronics and fashion now running week, and indeed fortnight, long promotions.”
Retailers are also preparing their online platforms and distribution networks for the second leg of this big shopping weekend, which comes in the form of Cyber Monday, falling this year on Monday, 26 November.
“Online is the fastest growing retail channel at present and while it still only accounts for a small portion of total retail sales, retailers are increasingly looking to it to drive growth in their businesses. Irish consumers spent €4.6 billion online in the last quarter, and full year online sales are likely to top the €15.8 billion spent in 2017. The recent announcement by Enterprise Ireland of a €1.25 million support scheme aimed at supporting small retailers establish and upweight their online presence was most welcome, but more must be done to support indigenous businesses move into the online world,” said Mr Burke.