I absolutely agree with Graham Ruddick’s earlier piece in Property Week on Black Friday - retailers now face a two tier Christmas, where shoppers bring forward their purchases to benefit from the plethora of discounts on offer for Black Friday, and then ‘panic buy’ the week before Christmas.

Jonathan De Mello

The former - at least based on what happened in 2015 - benefits principally online retailers, whilst the latter benefits those retailers that have a physical presence on the high street.

For this reason, Black Friday is generally a bad thing for traditional bricks and mortar retailers, as even though many now have strong transactional websites, their margins are always going to be thinner than online pure-plays; it is a zero sum game - if they discount as deeply as their online peers then they lose money, whereas if they don’t, then shoppers will go elsewhere in their search for a pre-Xmas bargain.

Since Amazon brought Black Friday to the UK, the first three weeks of December have been significantly down for many retailers on a like for like basis, given a natural reticence among shoppers to buy products at full price, when during what has now become - ridiculously - a ‘Black Friday week’ the same products are significantly cheaper.

Black Friday

This has hit margins at a time when margins should be at their highest level - many retailers in fact make up to 50% of their profit from Q4 - Black Friday essentially wipes a lot of this profit out.

Because of wider political and macro-economic events I believe this years’ Black Friday period will be the strongest ever in terms of revenue - not profit - for the retail sector in the U.K. as a whole (including online). Christmas Eve, Christmas Day and Boxing Day will also be strong given Christmas Eve falls on a Saturday this year - making it easier than ever for principally male shoppers (including myself!) to buy last minute presents.

Shoppers will indulge in ‘one last hurrah’ before battening down the hatches and reigning in their spend

I feel that shoppers will indulge in ‘one last hurrah’ before battening down the hatches and reigning in their spend given a mooted Brexit next April.

Whether Brexit actually happens next year remains to be seen, but I fear that a number of retailers will fail next year given a perfect storm of falling post Xmas consumer demand, currency hedging running out (a large volume of retailers have hedges that run out in Q1 2017) and a significant increase in business rates.

A reduction in corporation tax would be most welcome  but would be too little, too late in the context of reduced consumer demand and rapidly increasing costs. Black Friday 2016 - for some retailers - could indeed be the beginning of the end.

Jonathan De Mellohead of retail consultancy at Harper Dennis Hobbs