Will small businesses benefit from Black Friday this year?

Black Friday has become an increasingly popular shopping event as shoppers try to score bargains before Christmas.

But while large retailers are using it as an opportunity to bolster their revenues, the situation is more complicated for small businesses.

Last year, 85 percent of independent UK retailers surveyed by the British Independent Retailers Associations said they rejected Black Friday discounts.

Many small businesses continue to struggle, after two years of interrupted trading due to the pandemic and consumer confidence taking a hit this year – so lowering their prices in hopes of boosting sales can seem like a big risk.

But given that the British are expected to spend more than £4 billion this Black Friday and Cyber ​​Monday, is it something small businesses can still ignore?

We look at what small businesses plan to do when they’re under pressure to discount before Christmas, and whether the juggernaut that is Black Friday can really act as a lifeline.

Shoppers are spending less this holiday season

The cost of living crisis is likely to have a major impact on consumers’ willingness to spend on Black Friday.

While some shoppers may be on the hunt for bargains ahead of the Christmas season, consumer confidence has taken a hit this year.

The latest EY Future Consumer Index, which surveyed UK consumers just after the September mini-Budget, found consumer confidence was at an all-time low with just 26 percent of respondents confident about the future.

Rising prices mean some consumers may be using Black Friday discounts to try and save some on their Christmas gifts.

But the same survey also found that almost half of UK consumers expect to spend less this year than in previous years over the holiday season, compared to 22 per cent in 2021.

And many have more pressing financial concerns than buying Christmas presents.

A survey by consumer research platform Attest found that a third of UK consumers cut back on their Black Friday spending to save money, and a quarter use the money to pay their energy bills.

“Inflation and everyday concerns about the economy weigh heavily on the minds of almost all UK consumers ahead of Black Friday,” said Jeremy King, CEO and founder of Attest.

Consumers’ desire to save or be extremely cautious when it comes to spending extends beyond Black Friday, with three-quarters admitting to changing their gifting behavior this Christmas.

“This presents major challenges for all retailers – with changing priorities, patterns and places where people plan to spend money – and while this will be one of the most competitive Christmas retail periods in a long time, there will be winners.”

Why Some Small Businesses Avoid Black Friday

The shoppers who do look for discounts this weekend will be much smarter than in previous years.

A survey by YouGov, commissioned by rewards website TopCashback, found that 51 percent of shoppers say they rely on Black Friday deals to pay for their holiday shopping this year. While others plan to use the sale to buy products that will save them money in the long run.

Among the most popular money-saving items Britons plan to buy are airfryers (15 percent), heated airers (6 percent) and microwaves (5 percent).

Adam Bullock, UK director of TopCashback said: ‘Black Friday 2022 will be very different from previous years. Perhaps for the first time ever, instead of just hungry for a bargain, shoppers across the country are relying on sales to buy something they need.

“Whether it’s a Christmas present or a new energy-efficient gadget, savings offered on Black Friday offer UK families the perfect opportunity to reduce their spending ahead of one of the most expensive times of the year.”

While Black Friday may be an opportunity for consumers, small businesses will take the brunt and are already feeling the pressure.

Most independent brands won’t be able to offer the same mega-discounts that larger retailers can and don’t have the capacity or desire to handle the extra cost.

Maryann Penfold, owner of craft hot chilli sauce maker Boom Sauce said: ‘Black Friday is a kick in the teeth for small independent retailers. Massive tax-evading companies promote “deeply discounted” stocks, tricking you into thinking you’re getting a deal.

“This undercuts small businesses and takes away sales that could have been made with small independents. Small businesses promoting Black Friday deals are being trapped, so please don’t compete with large institutions.

‘The self-employed simply cannot compete with such low prices.’

Avoiding Black Friday discounts can work in favor of some independent businesses as they rely on loyal customers.

Barry Whitehouse, owner of Banbury-based art shop The Artery said: ‘Black Friday can indeed be a dark day for small independent retailers as all the razzmatazz and hysteria surrounding it can encourage even the most loyal local shoppers to go online and buy through a retail giant.

It can also put real pressure on small businesses to lower their own prices at a time when many are already on the verge of collapse.

‘Luckily we have a loyal customer base who understand that an independent store is more than just a place to do business, but a place to chat and meet others in the local community.

“That experience more than makes up for a quick one-off savings thanks to Black Friday discount.”

Black Friday ‘a necessary evil’

While some companies are steadfast in their resistance to Black Friday, others have little choice when it comes to taking on the big retailers.

Steph Briggs, owner of La Di Da Interiors, described the shopping event as “a necessary evil.”

“Last year I reluctantly embraced it for the first time and decided to overlook the quick cash injection margin,” she said.

“Given the snail pace this year I have no choice but to do it again. It’s a delicate balance between not alienating your existing customers and offering bargains for mass appeal. It is heavy.’

A survey of 1,000 small retailers by Newspage and Shopapp found that eight in 10 say Black Friday puts pressure on them to lower their prices to stay competitive.

Bryony Lewis, founder of the Wareham-based online gift website, T & Belle said: ‘I want to hate Black Friday, and in many ways I do. I hate the version of it where people flock to huge retail giants who trump substandard electronics at slightly less than usual prices.

“But I can’t argue with the fact that it’s been the strongest sales weekend of the year for my small business for several years in a row.

“Last year I made more money that weekend than the whole month before. So instead of avoiding it, I try to embrace it and shout about small shopping instead of lining the pockets of the big stores.

“Frankly, I think it would be foolish to ignore Black Friday weekend when my company’s future hinges on a good last quarter.”