Retail Ireland, the Ibec group that represents the retail sector, today said retailers are gearing up 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 become an increasingly important part of the Irish retail promotional cycle in recent years, but the elongated discount event has distorted the trading period for many retailers and places already tight margins under further pressure.
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 become a much loved 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 been struggling in recent times in an intensely competitive market.
“With prices falling by 8.4% in the last 36 months, this Black Friday looks likely to break records both in terms of the level of discounts on offer, and also in terms of the spend by Irish consumers. Retailers have continued to heavily discount products in recent months in order to drive footfall, and with consumer disposable income up 5.4% in the first half of 2017, consumers stand to benefit from even greater spending power over the coming days and into the Christmas period.”
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, 27 November. Following a large fall in the value of Sterling in recent times, online retail transactions have grown strongly with total ecommerce spend likely to exceed €16 billion before year end. This would represent a close to 50% increase since 2015, highlighting the increasing numbers of Irish consumers shopping online. Irish retailers have reacted to that move and are heavily discounting products through their online platforms to retain consumers and encourage transactions in the run up to Christmas.
“While Black Friday and Cyber Monday sales are good news for shoppers they do present a challenge for Irish retailers. Total sales in December 2016 fell by 1.2 per cent when compared with the previous month. This fall in sales, in what should be the busiest month of the year for retailers, highlights that an increasing proportion of Irish consumers are now making a significant number of their Christmas purchases in November in order to take advantage of the deep discounts available in this promotional period. The question retailers are now asking is whether or not such shopping events are merely displacing consumer spend and reducing margins over the crucial Christmas shopping period”, Mr Burke said.