01 December 2014

What to make of Black Friday – the latest retail phenomenon imported from the USA that looks set to rival Halloween as a shopping bonanza? Personally I can think of nothing worse than scuffling with a few thousand other people to save £200 off a telly, but it obviously has its attractions for many.

So far, there’s no sign of the UK auto retail industry adopting the day, though one car dealer in the US has put an interesting slant on it. Buy any new Buick or GMC over this weekend and you’ll get it for free, providing it snows in Chicago on Christmas Day*.

Let’s remember, Black Friday was for generations in the US a way for retailers to clear old stock before the Christmas rush. Americans don’t start their festive shopping until after Thanksgiving, which sounds eminently sensible to me. Imagine if we could ban all Christmas merchandise until December 1, at the earliest!

There are commercial implications though. In a wonderful turn of phrase, Professor Chris Edger, retail expert from Birmingham City University, describes Black Friday as “a vampire retail squid”.

He says it will end up “spreading out throughout the month, sucking margin out of November trading” and warns “the margin consequences of this move, as consumers become addicted to November discounting and expect it as a matter of course, could have grave consequences for profitability over the longer term for some retail players”.

The auto retail industry doesn’t need any lessons in chasing market share over margin. We’re global experts at it. And it’s hard to see how cars could be discounted any further.

So, call me Scrooge if you will, but I’m going to sit Black Friday out.

Rupert Saunders
* other conditions also apply: don’t they always?

Tags: Approach to FCA