Black Friday: a gimmick, or the new January sales?

Twitter tales of fights and brawls between bargain hunters at Asda last Friday morning could mean only one thing: Black Friday had come to British stores.

Asda has tried before to recreate the hoopla and hype of the US-based Black Friday sales - which take place the day after Thanksgiving Day, and mark the start of the Christmas shopping season over there - but its efforts were limited to online.

This time around it really went to town, introducing Black Friday sales events across its estate, supported by TV ads promoting bargains like the £99 Polaroid 32in LED TV and £49 Cyclone Explorer 7in Tablet.

Asda claims sales more than lived up to the hype. The Walmart-owned retailer reported a 400% volume sales uplift on technology for the day, with 16,000 tablets sold out within the first hour of trading. And all 500,000 of its Black Friday general merchandise items were sold out across the country before the day was out - representing a 130% increase in GM volume sales on the same Friday in 2012.

“This is how customers react to genuine deals, not gimmicks and promotions, and we have put a stake in the ground for any other retailers who try to follow our lead next year,” says GM CMO Andrew Moore.

So how have rivals responded to Asda’s move? Is Black Friday set to become a UK fixture?

Most retailers chose to ignore it entirely. Those that did limited their response to online.

Sainsbury’s ran nearly 250 online deals on Black Friday and Cyber Monday, its more virtual cousin, with the retailer talking up the subsequent online traffic. “With Christmas around the corner, online sales jumped 200% last weekend,” said John Tranter, Sainsbury’s head of trading for general merchandise online.

“This is how customers react to genuine deals, not gimmicks and promotions, and we have put a stake in the ground for any other retailers who try to follow our lead next year”

Andrew Moore, Asda

John Lewis also ran a Black Friday promotion online. Online sales last week were £147m - up 18.4% year on year and 19.4% higher than the previous biggest week, according to its trading report. “We saw record sales online and via mobile devices any doubts on whether UK consumers are interested in Black Friday has been cast aside,” says Matt Lewis, online director at John Lewis.

Bryan Roberts, retail insights director for Kantar Retail, believes “the January sales are losing relevancy, with discounting now prominent in supermarkets year-round… and UK consumers will slowly embrace the Americanism of Black Friday in the same way they did Halloween.”

“The fact three of the biggest UK retailers for GM, Asda, Argos and John Lewis, have all embraced Black Friday could force Tesco’s hand next year,” he adds.

Analyst Nick Bubb agrees: “Sainsbury’s doesn’t have the non-food exposure to lose much sleep over Asda’s promotion, but Tesco will need to think about it next year, despite their move away from selling bottom-end electricals.”

However, he’s not convinced Black Friday will work long term. “If Asda think selling a load of cheap TVs for zero profit is the answer to all their problems they ought to think again. The problem with all Black Friday deals on electricals was they probably just pulled forward business that would have happened anyway at full price and they only provide a modest short-term advantage.”

Without a bank holiday event like Thanksgiving, the timing of Black Friday in the UK market is “questionable”, according to Matt Piner, research director at Conlumino. “The culture of promotions is a bit of a drug for post-recession retailers at the moment and although they create uplifts, there is a knock-on effect on profitability as making money out of discounts on high-ticket items is tough.

“Yes, this discounting will help generate some excitement and create an uplift in sales this Christmas, but selling such high-ticket items will come at the expense of margins.”

Roberts was at the Wembley Asda superstore last Friday and saw over half of the customers stick around to do a grocery shop after picking up items such as tablets and TVs, and he says that using Black Friday to boost sales in other areas outside the promotion window is key to its future success at UK supermarkets. He may have a point Asda reported a 110% year on year uplift on online GM sales last Friday despite it being outside the Black Friday deals.

But though the jury is still out on whether Black Friday can become more than a marketing gimmick in Britain, you would be “a fool” to dismiss it completely, adds Planet Retail analyst David Gray. “Asda set out to create a buzz and with queues across the country they succeeded. But there will need to be more than three UK retailers taking part next year for Black Friday to seriously rival the January sales. Those two little words have to become embedded in the subconscious of British consumers before more retailers risk backing it as at the moment it is still a work-in-progress, albeit a very exciting one.”