London-based fitness coach Mattia Di Bilio is gearing up for the Black Friday frenzy, eagerly eyeing online discounts as a lifeline in the face of Britain's relentless cost-of-living crisis. For Di Bilio, the purchases of sports and training gear are essential investments, but with inflation tightening its grip, he is strategically navigating Black Friday deals to keep a cap on his expenditures.
“I always purchase a lot on Black Friday. It’s stuff that I need. I want to invest, but I don’t want to waste,” Di Bilio told Fortune, illustrating the financial tightrope many Britons are walking amidst rising prices.
As the specter of the cost-of-living crisis continues to loom large in Britain, Black Friday discounts emerge as a crucial avenue for consumers to stretch their budgets, weathering the storm of elevated prices.
“Black Friday will be resilient—you could even argue [it’s] because of the cost of living crisis,” asserts Jessica Frame, Managing Director and Partner at Boston Consulting Group, specializing in retail.
The latest report from BCG reveals that factors such as inflation, recession fears, and global conflicts are reshaping consumer spending patterns. British shoppers, facing the brunt of economic challenges, plan to spend an average of £300 (approximately $373) this Black Friday—an 11% increase from the previous year—driven by a strategic approach to holiday season buys.
BCG's insights align with forecasts from Adobe Data Insights, projecting a 10% surge in Black Friday spending in the United Kingdom, compared to a mere 2.7% increase across the entire holiday season. Those abstaining from Black Friday shopping cite rising prices as the primary deterrent, further highlighting the critical role of deals in navigating the current economic climate.
“Often deals can help us access things we can’t otherwise afford. In the current climate in the U.K.…it’s really about how can you make the budget stretch, how can you make ends meet when otherwise it’s quite challenging,” explains Frame, emphasizing the significance of Black Friday as a strategic financial maneuver for Britons grappling with the cost-of-living crisis.
Not all analysts agree that 2023 will feature a booming Black Friday
However, other estimates suggest a looming dip in overall spending. PwC, the auditing heavyweight, projects a descent from the £7.1 billion spent in 2022 to a more restrained £5.6 billion this year.
The contrast in data is because although the people who want to spend this year plan to spend roughly the same amount as the previous year, fewer people are saying they will spend, PwC’s senior retail advisor Kien Tan says.
“Partly, it’s because some of the Christmas shopping started earlier because people are budgeting more,” Tan says, adding that Black Friday falling before payday on Nov. 24 is another reason that could hold people back. He pointed out that among adults aged 35 to 44, the reason for not planning to shop during the discount window was to scale back expenses.
“So, it really is very much that the cost of living crisis has hit this year. Last year, it only just started,” Tan said.
Watch out for Black Friday traps
While Black Friday traditionally promises the allure of big savings, the eagerness to bag a deal often blinds consumers to deceptive pricing strategies.
Shoppers, tightening their purse strings amidst a cost-of-living squeeze, find themselves on a precarious tightrope, striving to balance their desire for dream products with a wariness of inflated price tags.
“The cost of living is putting a lot of extra pressure on households this Christmas so we’ve seen many retailers starting the sales season early to help people spread the cost,” Natalie Hitchins, Which? Head of Home Products and Services, told Fortune.
Which?, a U.K.-based consumer-focused advocacy, found that oftentimes, “genuinely good deals” are hard to come by.
For instance, the group’s research revealed that in 98% of the cases, products were cheaper or at a similar price point year-round compared to the Black Friday deal on them in 2021. In 2022, the same was true of 86% of the products Which? investigated.
“While our research shows there are some good deals to be had on Black Friday, they are few and far between,” Hitchins said. “Like last year, we’re advising shoppers to do some research to help them hunt down the minority of deals that really are a bargain, so they emerge from the mammoth sales event with high-quality products at a reasonable price."
With households laser-focused on budgets this year, clear communication on pricing becomes paramount. Frame from BCG adds insight, noting that customers seek straightforward money-off deals that instill trust and assurance that they're indeed saving.
