Let’s get one thing straight about Black Friday - most retailers hate it.
The US shopping phenomenon has completely changed the shape of Christmas spending, and it has made the vital festive period far more challenging for retailers.
Black Friday, as everyone now knows, takes place on the last Friday of November. It involves retailers offering promotions and discounts that make the traditional Boxing Day sales seem a damp squib.
In the US, where Black Friday has been taking place for decades, the promotions serve a purpose. They encourage consumers to get back into shops straight after Thanksgiving and mark the start of the Christmas season.
But in the UK, there is no logic behind Black Friday. The phenomenon made its way across the Atlantic thanks to Amazon, which five years ago started offering UK customers a flavour of what was available in the US. Amazon customers liked what they found, so every year the company offered more deals.
By 2013 Black Friday was on the radar of all savvy shoppers, with Asda, owned by Walmart, offering deals within its stores. However, it was 2014 when Black Friday went mainstream.
Last year, Amazon attracted 5.5 million orders on Black Friday, up by 30% compared with the previous year and way ahead of all expectations. Black Friday 2014 was, and still is, the biggest-ever online shopping day in Britain. However, there were also chaotic scenes in stores, with Tesco opening its doors at midnight and attracting the ire of police.
Unfortunately for retailers, though, Black Friday did not generate extra spending; it just dragged sales forward. According to Springboard, footfall at retail destinations was down by 3.3% and 2.2% year on year in the two weeks after Black Friday, while Boxing Day traffic fell by 8.8%.
This slump led to some nervous retail bosses on the high street as spending effectively dried up in the first two weeks in December.
Retailers are used to a gradual build-up of spending at Christmas. However, last year they saw a splurge on Black Friday and then another splurge in the week before Christmas Day as shoppers snapped up last-minute presents and food.
This U-shaped spending pattern, which will be repeated this year, is not helpful for traditional retailers or online-only businesses, whatever they say. The intensity of the spending puts logistics under immense pressure, and last year Marks & Spencer, Argos and others buckled. Argos is under more scrutiny this Christmas as it tries to roll out a new same-day delivery service and a ‘fast-track’ click-and-collect service across the country.
Black Friday also means retailers are selling their products at a discount at the time of year when demand is supposed to be highest. Shoppers don’t just snap up bargains for themselves on Black Friday, but also Christmas presents. As a result, retailers suffered a fall in profit margins last year.
It was not surprising that retail bosses including John Lewis’s Andy Street warned after the shenanigans of last Christmas that the industry had to approach Black Friday carefully.
However, Black Friday 2015 is on course to be the biggest ever. Amazon, for example, has hired 19,000 seasonal staff compared with 13,000 last year and plans to more than double the number of deals it offers customers from 3,000 last year. Even John Lewis is budgeting for Black Friday to be 20% larger.
The problem for retailers is that while they may want to avoid Black Friday, they cannot afford to. If they do not offer deals shoppers will go elsewhere, and they will not spend their money again. Clothing retailers were among the biggest losers last year, partly because they didn’t really participate in Black Friday, so expect more deals from them in 2015.
One complication for the forthcoming festive season is that the last pay day before Christmas falls on Cyber Monday, the first Monday of December when families traditionally buy their presents online, so some spending could be held back from Black Friday.
But whatever happens, spending on Black Friday is sure to top last year’s record-breaking numbers - and retailers will be celebrating through gritted teeth.
Graham Ruddick is senior business reporter at The Guardian