Wal-Mart’s UK grocer Asda backs away from Black Friday
November 13, 2015 10:22 AM
(Bloomberg)—No sooner had the U.K. embraced Black Friday than the American holiday shopping tradition looks to be on its way out.
Asda, the British supermarket that imported the event from U.S. parent Wal-Mart Stores Inc. in 2013, said this week that it won’t participate this time around. Instead of having customers line up all night for a limited number of heavily discounted items such as flat-screen televisions, Asda, No. 9 in the Internet Retailer 2015 Europe 500, plans to reduce prices by 26 million pounds ($39 million) across the season.
Asda’s move illustrates how U.K. retailers are backing away from a quintessentially American custom, only two years after adopting it. Black Friday events last year saw customers fighting in the aisles, while retailers’ websites crashed after being unable to cope with demand. Store chains including John Lewis and Argos have recently expressed misgivings about such events. U.S. retailers are also showing restraint: Discounters Wal-Mart Stores Inc., No. 3 in the Internet Retailer 2015 Top 500 Guide, and Target Corp. (No. 16) will spread out deals over a longer period.
Last year’s Black Friday “damaged Christmas gift spending and it took sales away from full-priced sales over the Christmas period,” said Richard Perks, director of retail research at Mintel. “We think U.K. retailers will concentrate on damage limitation from now on, though it is clear that no one feels that they can really ignore Black Friday.”
Asda said its decision reflects “shopper fatigue setting in around flash sales on big-ticket, nonessential items at Christmas.” The supermarket gathered feedback from shoppers and found that they would prefer offers on items across the holiday season, rather than the “hustle and bustle” of a single-day sale event. Black Friday, which is always the day after Thanksgiving, falls on Nov. 27 this year.
“Customers have told us loud and clear that they don’t want to be held hostage to a day or two of sales,” Asda CEO Andy Clarke said in a statement.
Clarke isn’t alone in his thoughts. Earlier this year, John Lewis Managing Director Andy Street said it was “collective madness” that retailers “line up to give our product away” four weeks before Christmas. Home Retail Group Plc, owner of the Argos chain, said Oct. 21 that a repeat of last year’s “almost unnatural” level of Black Friday orders and heavy discounting may cause difficulties.
Women’s fashion retailer New Look, No. 121 in the Europe 500, still plans to participate in Black Friday, though not to the same extent as last year, the first time it held such an event. The reduced involvement is mainly a reflection of an improved inventory position compared with last year, CEO Anders Kristiansen said by phone after New Look reported an 11% increase in first-half operating profit.
Mintel estimates that total U.K. retail sales will grow 2.5% to 42 billion pounds in December. As many as one in 10 Britons who bought Christmas gifts last year did so on Black Friday and Mintel estimates that the occasion boosted November’s sales in 2014 by 400 million pounds, 50 million pounds of which were online.
Not all retailers are scaling back their Black Friday plans. Very.co.uk, part of the closely held Shop Direct Ltd., says this year’s event will be larger than ever.
“Far from canceling it, we are planning bigger and better deals over a longer period to make this Black Friday our best ever,” Shop Direct CEO Alex Baldock said by email.