Forecasting Eye 

 

Christmas period sales have risen in line with retail sales values for the rest of the year since Black Friday started to become popular in the UK. However, spending is now concentrated in Black Friday week and the week before Christmas, with a £160 million shift from the weeks surrounding Black Friday to the period of discounted prices.

 

Amazon introduced Black Friday – the day after Thanksgiving in the USA – to the UK in 2010, with discounted prices on a range of goods. Its popularity started to increase from 2013, when Walmart-owned Asda took part, and in the years since it has become an established part of the UK retail sales calendar. Many retailers hope that the discounts kick-start consumers’ Christmas shopping and give a boost to the ‘golden quarter’ of sales. To understand whether Black Friday actually increases sales, Cebr studied weekly department store data to see how the discounts are affecting consumer spending patterns. As a share of the eight week peak Christmas shopping period, Black Friday sales were worth 13% in 2013 and increased to 15% in 2018. On the other hand, the value of sales in the weeks either side of Black Friday week decreased as a share of the total value of sales in the Christmas period.

 

Between 2013 and 2018, the total value of department store spending over the whole year increased by 16%. In the eight-week peak Christmas shopping period, total spending also increased by 16% over the same five year period, highlighting that overall Christmas spending rose in line with department store spending for the rest of the year. Therefore, price cuts in the weeks leading up to Christmas, such as the Black Friday sales, do not seem to be having a noticeable effect on the total value of goods sold in this time.

 

Using the total value of all non-food store retailing in the Christmas period in 2018 (source: ONS) and the observed shift in the share of spending allocated to Black Friday in the five years to 2018 we estimate that there is a £160 million shift in spending from the weeks surrounding the discounting period to the week of Black Friday.

 

Black Friday sales mean that the Christmas shopping period is now characterised by two peaks: Black Friday and the week before Christmas. People organised enough to consider their gift giving a month in advance make the most of the offers at the end of November, while those of us who aren’t as good at planning ahead leave Christmas shopping to the last minute.

 

Weekly share of department store sales values in the eight week Christmas period, difference from simple average of 12.5%, in percentage points

Methodology: Cebr used weekly retail sales figures from John Lewis Partnership for this analysis, which have a 71% correlation with ONS department store retail sales value statistics. Therefore, we assumed that these figures are representative of the department store industry.

 

We defined the eight week Christmas shopping period as the weeks surrounding Black Friday week where Black Friday falls on week 3. Christmas can be four to five weeks after Black Friday, depending on the date of Thanksgiving that year.

 

Contact: Josie Dent, jdent@cebr.com Tel: 0207 324 2864