The Black Friday phenomenon seems to be sticking around in the UK, as more and more retailers have extended offers on both sides of the big day.
But there could be a darker side to the shopaholic frenzy, according to KPMG. Data compiled by the accountancy firm has found that profit margins of the UK's top 10 retailers by revenue have been squeezed since the event hit UK shores around 2013.
An analysis of annual reports, sales revenue and profit margin data has shown a stagnation in cumulative sales revenue since 2013, and declining profits.
“Black Friday and similar discount-based retail events have certainly played a role in this state of affairs, but mounting cost pressures more broadly – as well as the overarching economic situation – will also have had a significant impact,” said KPMG's UK head of retail Paul Martin.
“Amidst all the hype of Black Friday, as consumers scrabble for bargains and retailers frantically parade their discounted wares, it is easy to overlook the undercurrent created by the retail event. Retailers, dazzled by top-line sales growth, could easily underestimate the impact prolonged discounting is having on their bottom line.”
Martin explained that Black Friday forces retailers to sell their goods at discounted prices earlier, and for longer, while consumers have grown to anticipate sales.
He added that research has shown the event doesn't increase sales for retailers over the Christmas trading period, but simply brings spending forwards.
But already today Argos has had record numbers of visitors to its website, while Barclaycard processed a all-time high of 976 transactions per second between 12pm and 1pm.