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Black Friday deals in the UK face criticism over pricing

November 21, 2016 12:14 PM
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(Bloomberg)―Since bursting onto the British retail scene two years ago, Black Friday has spurred fighting in stores and a frenzy of demand that has overwhelmed retailers’ websites. Some discounts didn’t merit the clamor.

In the U.K. last year, 49% of Black Friday deals on popular electronic gadgets and home appliances could have been beaten in the three months leading up to the event, or the two months after it, consumer watchdog Which? found. Some retailers misrepresented the size of discounts during the event by briefly raising prices before offering deals, said the 59-year-old group, the public face of the U.K. Consumers’ Association.

“If you’re thinking about starting your Christmas shopping around Black Friday, do your research,” said Pete Moorey, head of campaigns at Which? “Some deals may not be all they’re cracked up to be.”

The findings will add to a growing cynicism around an event which was brought to the British masses by the likes of Amazon.com Inc., No. 1 in the Internet Retailer 2016 Top 500 Guide, and Wal-Mart Stores Inc.’s (No. 4) Asda in 2014. Without a Thanksgiving holiday to anchor the shopping bonanza, some U.K. retailers and analysts have questioned the merits of the occasion. About a quarter of Britons shopped on Black Friday last year, compared with around half of Americans, and that percentage is set to drop this time around, according to a survey by consultant Retail Economics.

Government guidelines

In an investigation conducted this time last year, Which? tracked Black Friday offers on 20 popular electronics items at Amazon, which also is No. 1 in the Internet Retailer 2016 Europe 500; J Sainsbury Plc’s Argos chain (No. 21 in the Europe 500); AO World Plc and Currys, owned by Dixons Carphone Plc (No. 15). Online home-appliances retailer AO and Currys were found to have exaggerated their deals by cherry-picking some pre-discount prices, the watchdog said.

According to Which?, both retailers broke government guidelines stipulating that goods on sale should be listed at the original price for 28 consecutive days prior to going on sale. Currys and AO both told the consumer group they had adhered to regulations with regard to displaying discounts.

“We fundamentally disagree with the approach taken by Which? in this report and comply fully” with government guidelines, Currys said in a statement. The retailer clearly displays the date of the price that discounts were taken from “allowing customers to make a fully informed decision.”

AO World said in a statement that it continually changes prices to “ensure we offer the best price in the electricals market.” The six-year-old government guidance on discount pricing was designed for store-based retailing rather than faster-paced online selling, it said.

Growth forecast

The watchdog’s report will be no help to a retail industry that’s in need of a holiday boost after a year blighted by store closures, bankruptcies and rising wage inflation. A strong Black Friday would be a good start and researcher IMRG forecast on Wednesday that online spending will rise 16% to 1.27 billion pounds ($1.58 billion) on Nov. 25.

To better cope with the heightened demand, Amazon and Tesco Plc (No. 3) are spreading out their Black Friday deals over two weeks this year. IMRG predicts spending of 6.77 billion pounds ($8.44 billion) over the peak eight-day period ending Nov. 28.

In the U.K., electrical goods are a focal point for retailers on Black Friday. About 55% of Britons planning to shop on the day said items such as televisions, computers and phones will be what they’ll spend the most on, according to PricewaterhouseCoopers.

 

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