UK retailer John Lewis’ chief wants Black Friday discounting toned down
05 Jan 2015
Andy Street, managing director of UK retailer John Lewis, has warned that UK firms needed to reconsider heavy discounting on Black Friday.
The end November sales day had brought the company its biggest trading week on record, with sales up 22 per cent on last year.
However, according to Street, the US-inspired phenomenon was "more challenging profitability-wise".
Street told the BBC that it needed to be questioned whether it was right to concentrate trade so much in that one period.
"My personal hope is that this is the high water mark for Black Friday. I don't think we can put the genie back in the bottle but do we need to stoke that fire anymore? I personally hope not," he added.
Street said Black Friday put retailers' back end operations, such as online deliveries, under pressure, and though he expected continued promotions in key electrical items, he hoped that fashion brands and other shops would be "more confident holding their price".
His comments came after the department store chain issued its Christmas period sales, showing that sales in the week of Black Friday exceeded sales in the week of trading in the run-up to Christmas.
The Guardian reported Street as saying it was not in the interests of retailers to continue to grow the pace of Black Friday at the expense of other weeks. He urged fashion stores and other retailers to ''play it down'' next year and leave the day focused on electrical goods.
He added, John Lewis's ''overall picture'' on profitability in the five weeks to 27 December was similar to last year, as underlying sales were up 4.8 per cent.
Margins suffered a hit due to the concentration of electrical sales into the Black Friday weekend in late November but were helped by a late surge in clothing.
The American inspired bargain day on 28 November had affected the sales of electrical goods the most, with sales proving markedly volatile, up 6.8 per cent overall during the five weeks to 27 December, but down 14.7 per cent in the last fortnight, as against a huge 41 per cent rise during Black Friday week.
In contrast, sales of fashion increased strongly in the last days ahead of Christmas, as Street said shoppers sought out knitwear, beauty and food gifts rather than tablet computers and phones in a last-minute rush. That pattern led to a 5.8 per cent increase in fashion and beauty sales over the five weeks to 27 December, despite the impact of the warm autumn.
