As the Black Friday sales fast approach, the excitement of the scene remains quite low. Even though one can find shoppers lining up at the market, the festive vibes seem to be missing. The reasons for this apparently point to the untrammelled cost-of-living crisis prevailing in the UK.
Data suggest that over two million households exist without essential appliances like fridges, cookers, or washing machines. Four out of five families relying on universal credit report going without food, sacrificing heating and forgoing the replacement of worn-out clothing, and three million low-income households have accumulated debt to meet their basic food needs.
The divide in the UK social fabric is deep. The income of the top 0.1% touches £9,615 per week, this is a hundred times more than the person who claims universal credit of £92 per week.
The picture painted above is quite ugly and forboding when it comes to the expectation of a high footfall during Black Friday. The numbers of shoppers as the data states have been below the pre-pandemic levels until last year.
Consumer confidence plummets
Research by firm Censuswide, which took a sample size of 2000 respondents, revealed that almost 40 % of consumers are less likely to participate in Black Friday this year due to the rising cost of living – and around two in three (64%) cut back on the amount of non-essential items they buy.
Moreover, the survey reveals that over half (56%) of consumers expect to spend less over the festive season overall. Half (49%) of online businesses surveyed anticipate a week of peak season, while an estimated one in four (27%) are worried about bankruptcy or insolvency.
We can dive a bit deeper in our analysis, juxtaposing the Black Friday sales with the cost of living through the UK Consumer Confidence Index (CCI). CCI is a crucial indicator, as consumer spending significantly influences overall economic activity. A high index signifies a high confidence that translates to higher spending, thus more money is pumped into the economy, while a low index indicates pessimism that causes reduced spending.
The latest data by the UK parliament suggest that this confidence, which was already under zero since 2017, has now dropped to a negative 30 which is a further drop by nine points since September this year. Thus, highly negative consumer confidence appears to cast a shadow over the upcoming Black Friday sales.
Data collected by Barclays corporate shows that October 2023 had a 1.2% increase in overall retail expenditure over the same month in the previous year, the lowest rise since December 2022. This coincides with the fact that October’s unusually mild weather caused shoppers to postpone buying seasonal items like jumpers and winter jackets, which led to a 4.0% decline in spending at clothing stores for the fourth consecutive month in October 2023.
Black Friday 2023: damp squib?
Further, to pay for their energy costs throughout the autumn and winter, 47% of consumers also want to reduce their discretionary expenditure. The most prevalent areas of reduction are new clothing and accessories for daily use (50%) and other purchases.
The data further provides that 36% of the consumers expect that Christmas will be more expensive than 2022 and 21% are concerned about keeping up with the cost during the festive period. Most importantly 37% of consumers have said that they will spend less on Christmas gifts this year.
The above statistic clearly points to a prediction that Black Friday sales might well be a damp squib.
However, there might be a sign of hope as per the Office of National Statistics – the average pay in UK has started to grow ahead of inflation. The ONS has reported that the wages were 7.7% higher than a year earlier in the three months to September. This means that the people are earning an increased wage which might translate to a normal black Friday sale. But this prediction is a big ‘if,’ and is solely based on a reported increase in wages.
The anticipated ambiance of this year’s Black Friday sales aligns with the prevailing scenario, reflecting a subdued atmosphere that resonates with the challenges confronting a substantial portion of the population. The pervasive cost-of-living crisis has thrust millions of individuals into the struggle to meet their fundamental needs.
Economy on life-support
The data at hand portrays a disconcerting image of the economic landscape in the UK. The prospect of a potentially subdued Black Friday further emphasizes the urgent need for immediate attention and intervention. It serves as a stark indicator that the economy requires revitalisation, and swift measures are imperative to restore financial stability and place money back into the hands of the people.
The subdued nature of Black Friday this year is not merely a retail phenomenon but a symptom of broader economic difficulties. Addressing the underlying issues of the cost-of-living crisis is crucial to rejuvenate consumer confidence and stimulate economic growth.
The call for immediate attention underscores the necessity for strategic interventions that can pave the way for a robust recovery, ensuring the economic well-being of the populace. In essence, a proactive approach is essential to navigate these challenging times and foster a more resilient and prosperous economic future for the UK.