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ASDA to scale back Black Friday participation

ASDA Walmart Supercentre

Supermarket Asda says it will not take part in the shopping discount day known as Black Friday, which it helped to bring to the UK just two years ago.

The supermarket says "shopper fatigue" has set in "around flash sales on big-ticket, non-essential items at Christmas".

The event marks the beginning of the Christmas shopping season in the US.

Black Friday is not universally popular with retailers but experts were divided over whether others would follow Asda.

Last year, police were called in to supermarkets as scuffles broke out among shoppers vying to get the best deal.

Asda's owner, Walmart, is a big player in the Black Friday sales in the US and it helped to introduce the event to the UK in 2013.

"The decision to step away from Black Friday is not about the event itself," said Asda's chief executive Andy Clarke.

"Over the last two years we've developed an organised, well-executed plan, but 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."

It says that instead of investing in one-off sales, it will invest £26m in savings across the seasonal shopping period.

Analysis: Emma Simpson, BBC business reporter:

Asda has dramatically changed tack. This US-owned supermarket, along with Amazon, led the way in introducing this American phenomenon to UK shoppers.

So big was its effect last year, the event completely distorted Christmas spending, pulling forward sales, right at the most crucial time of the year when retailers should be selling their goods at full price.

Three years on, Asda is effectively trying to put the genie back in the bottle.

Asda cites customer fatigue, saying it reckons its customers want better savings across everyday Christmas items. But the move is not without commercial risk.

'Bigger than ever'

Retailer John Lewis has previously warned that UK firms would have to reconsider the heavy discounting of Black Friday, even though last year it brought the company its biggest trading week on record.

Earlier this year, managing director Andy Street said it was "more challenging profitability-wise" and 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 told the BBC at the time.

But John Lewis recently confirmed it would still take part this year.

"John Lewis has no choice. We are part of this whether we want to be or not," said commercial director Paula Nickolds.

"We are absolutely committed to our Never Knowingly Undersold pledge and this means we are part of this event.

"We are anticipating that Black Friday will be bigger than ever this year."

'Brave move'

Retail analyst Nick Bubb said Asda's decision did not mean the end of the discount day.

"Despite the general recognition that too much discounting ruins Christmas trading prospects, it's not the end of Black Friday, because online players, such as Amazon, are fully committed to it, as well as stores like Currys and PC World.

"But Asda were clearly sensitive to the embarrassing scenes last year of people fighting over cheap TV sets in their supermarkets and wanted to avoid any risk of reputational damage," he said.

Russell Craig, an Asda executive, said that he found the footage of people fighting over televisions "uncomfortable", but stressed that this was about how people wanted to spend their money at Christmas.

He told BBC Radio 5 live: "We underestimated the response customers would have. There is some extraordinary and uncomfortable footage of that time. Last year we had one store in Wembley, where we had well documented incidents, but in the rest of the chain it was very orderly and we managed it in the right way."

Greg Bromley, analyst at the retail research firm Conlumino, said the move was "risky" but could mean that Asda wins the retail battle over Christmas if the move allowed it to sell cheaper food, while other firms fought over electrical sales.

"It's quite a brave move. They're probably hoping that other retailers will follow their move," he said.

He added that there had been evidence to suggest that interest has been waning in the US as well.

'Disappointing month'

Separately, the British Retail Consortium (BRC) attributed "disappointing" retail sales in October to customers delaying purchases in anticipation of Black Friday, which this year is due to take place on 27 November.

It said the total value of retail sales between 4 October and 31 October was 0.9% higher than a year earlier, down from a 3.9% increase in September.

"October was a somewhat disappointing month overall for retailers," said Helen Dickinson, chief executive of the BRC.

"A number of categories which we'd typically expect to be popular on Black Friday saw a slowdown in October, suggesting that some shoppers may be holding out in the hope of some great deals at the end of November."

Source : BBC News
www.bbc.co.uk/news/business-34774289

10 November 2015

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