Cash-strapped shoppers will take advantage of Black Friday discounts this weekend as they try to make Christmas special, before tightening their belts as the UK enters into a recession.
While retailers may see a temporary boost in sales this weekend, shoppers will pull forward Christmas spending rather than “buying twice” as in previous years, Hargreaves Lansdown’s Sophie Lund-Yates told City A.M.
A historic trend of people “enjoying shopping sprees here, there and everywhere” in the run up to Christmas would not be on the cards this year, the analyst added.
Sales over the weekend are set to rise slightly by 0.8 per cent compared to the same period last year to £8.7bn, a forecast from VoucherCodes suggests, with shoppers relying on discounts “more than ever” to budget for Christmas.
Retail spending in the festive period would look “reasonably resilient,” but there would be a “huge pull back” in January, Yates said.
Amazon is expected to be the most popular site for purchasing Black Friday bargains this year, while electrical goods retailers such as Currys, Argos and John Lewis will also draw clicks, according to Hargreaves Lansdown analysis.
Customers at Argos are planning “more carefully than ever” for Christmas, as well as with everyday purchases, according to the catalogue retailer’s trading director, Matt Leeser. Shoppers are “buying items on their list only when the best deals are available,” Lesser said.
Black Friday comes as consumer confidence is at an all-time low, which has mainly been dragged down by Brits worrying about rising energy and food bills eroding their finances.
Economists have bet on consumers raiding their pandemic savings to maintain spending.
However, the threat of unemployment amid the coming recession means “households will act with caution when deciding whether to draw upon the pot of savings,” Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said.