This morning’s news that Next is to finally run a Black Friday promotion is a big surprise, to me at least. It has taken the company years of sitting on the sidelines to make up its mind to join the fray. For years, the middle market of retail has been the most squeezed. And for years, Next has been standing out as the strongest of the major players. It has enjoyed the strongest brand, built on consistency of product and trust. A key symptom of that strength has been the way it has dealt with promotions and mark downs – short, sharp and very aggressive. And never ever muddying the waters by promoting outside its few key end of season points in the calendar.
So is this a huge vote of confidence in Black Friday from a hitherto skeptical retail winner? I don’t think so. My interpretation is that this decision says much more about the company than about the event. Simon Wolfson has in recent years sometimes been called gloomy and pessimistic. I know the feeling! But I think he’s been too optimistic. This slowdown in our economy as finally acknowledged in yesterday’s Autumn Statement has been obvious for a very long time. And at its heart is a slowdown in retail.
My view is that the retail market has been weakening progressively as 2017 has unfolded. Every retailer I know has a cash flow somewhere short of expectations. For some, the pressures are quite worrying. Next will not be one of them, but I suspect this is more to do with wanting to boost flagging sales than a sudden liking for the lemming-like melee that is Black Friday.
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