This Black Friday 2023 comes at a bad time for the commercial sector and there is no excuse for the fuss. This is what experts think Credit and attentionwarn about retail sector He has the outstanding challenge of “balancing inventory levels, working capital needs, cost structure, and supply chain optimization in this campaign.” In practice, trade after summer faced a gradual decline in demand due to The impact of inflation and rising interest rates It was decided by the ECB. According to the Credit and Alert report published this Wednesday, “the rise in interest rates, the decline in consumer confidence and underlying inflation have reduced the disposable income and borrowing capacity of Spanish consumers.” The current situation has been read correctly by the majority of businesses that are shamelessly pushing the theoretical discount period this Friday with the idea of taking over sales compared to the competition. However, it is worth remembering that high discounts are a clear sign of difficulties in the business sector and a harbinger of problems in the income statement due to reduced profits. Experts therefore predict that sales will be lower than last year. And this was common in the weeks before the last Friday in November, although many times discounts were preceded by price increases. Crédito y Caución predicts that the current situation will be “reflected as follows” on Black Friday and Christmas purchases: moderate year-on-year decline in sales Spain”.
The credit insurer expects “a deterioration in margins, particularly in smaller companies, in the context of a decline in demand, increased competition on the supply side and aggressive discounts to balance stock levels with increased financing and operating costs.”
France
The situation of retail trade is similar in the countries around us. According to the Credit and Caution report, large discounts are expected in France due to high stock levels. Consumer electronics has been the most affected sector in 2023, with a decrease in sales of close to 5% compared to last year. An increase in defaults and bankruptcies in the sector is expected in the first half of 2024.
Germany
In Germany, where consumers are reluctant to spend on non-essential goods and their disposable income is decreasing, the worsening prospect of bankruptcy in the sector for next year has also been confirmed. Threat of recession due to high increase in costs Due to rising energy prices, businesses plan and influence consumer behavior.
Italy
In Italy, forecasts point to a 7% decline in the number of retail stores in 2023 compared to the pre-pandemic total. Sales of consumer electronics, cosmetics and textile products are expected to decline on an annual basis during the Black Friday and holiday shopping season. Only in the field of ecological or recycled products can this negative trend be reversed. Although the Italian e-commerce market is relatively small compared to the rest of Europe, smaller retailers will be particularly vulnerable to defaults and bankruptcies.
Holland
In the Netherlands, revenue from Black Friday and the Christmas season will remain the same or even increase Slightly compared to 2022 As an effect of inflation. While home appliance sales will perform relatively well during this period, consumer electronics sales will remain stagnant at best. High inventory levels can trigger discount wars among retailers, impacting margins.
United Kingdom
In the UK, where Black Friday is already well established, long-term discounts are expected to encourage a contraction in demand. The segments that may perform worse are electronics and household goods, namely the most expensive products.
United States of America
There are significant price reductions in the United States this week in conjunction with Thanksgiving and Black Friday. This intense activity is the trigger for a long Christmas sales season. American retailers are generally in a better position than their European counterparts. Sales are expected to increase between 3 percent and 3 percent 4% in November and December this year. Although growth is expected, there is a downward trend: Sales increased by 5% in 2022 and 13% in 2021. Additionally, 60% of the increase will occur in online commerce, making stores particularly vulnerable from a physical perspective.