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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.

** We advise retailers on strategy and analytics. We also track promotional activity across the UK’s key retailers. Get in touch for details admin@richardtalksretail.co.uk

I have been clear in my views of Black Friday. It’s crazy and for most retailers, it damages the brand and bottom line. For Amazon It’s a stick with which to beat much of the industry, and other predominantly online retailers can also benefit.  For most others though, PR departments work overtime to convince the outside world that it’s a great success.

Much of the trade would love to opt out but in this weakest of all retail markets, few have succeeded. M&S has transformed its promotional strategy this year and has already made its opt out clear. This week, we have found seven retailers who have already launched their Black Friday promotions – AO, Blacks, Currys PCWorld, Halfords, ShopDirect, Vodafone and Wiggle. In fact Halfords and Wiggle both got in first by launching last week. What is worth noting though is that none of these retailers had launched this time last year – perhaps a sign of the materially tighter market we are now seeing.

So what will Black Friday look like in 2017? Last year, 84% of non-food retailers took part. So far this year, promotions are tracking 2016 very closely and very slightly lower. I expect this pattern to translate into Black Friday with some of the stronger retail brands managing to opt out but most finding the fear of lost sales overwhelming.

With demand thin and consumer confidence brittle, Black Friday will essentially suck Christmas sales forward. This will ensure that most of UK retail will be on sale from early next week, right the way through until the New Year. So much for the Golden Quarter.

** We advise retailers on strategy and analytics. We also track promotional activity across the UK’s key retailers. Get in touch for details admin@richardtalksretail.co.uk

November is the month that demonstrates the extent to which our industry is out of control. Two really crazy, self-inflicted events occur One is Black Friday and the other is Christmas advertising. Both have lots in common.

No one has to do either but those that have in the past feel compelled to make them an annual event. The fact that any realistic analysis makes it virtually certain they both erode margins is set aside. PR machines get into gear and focus on anything, as long as it has no connection with return on investment. Both are relatively new and started in an apparently quite innocent way. Today, innocence is a luxury that the industry can no longer afford. Some interesting discussions about both have no doubt taken place around the Boardroom table. The one thing you can be sure of however is that no retailer resisting  either in previous sat down this year and said “…great idea, let’s do it”. There is a message in that.

As what used to be the golden quarter unfolds, retail distress is unfolding still faster. Discounts, job losses, the appointment of advisors to “review strategic options” are all symptoms of an industry unsure of where its revenue line is headed. Enjoy watching the ads!!

** We advise retailers on strategy and analytics. We also track promotional activity across the UK’s key retailers. Get in touch for details admin@richardtalksretail.co.uk

Amazing to see retail taking such a beating on the stock market today. All triggered by Next’s results which in themselves were not unexpected. More than any other quoted retailer, Simon Wolfson carefully manages market expectations to ensure no great surprises. Clearly, even he cannot force the market to take what he says about the trading outlook at face value. And equally clearly, the market has failed to do so.

This is by the toughest retail climate seen in modern times. Taking this observation to be gloomy is simply delusional. I know of no retailer out there that isn’t having to run much faster and many excellent brands are feeling the heat. The symptoms are there to see across the industry in physical and digital channels. And in responses. Most retailers have store closure programmes. Most retailers are culling people. Dealing with the cost line is all very well but it fails to address the core problem – weak sales.

A diet of discounting is only going to undermine brand perceptions and make sales weaker still. It is extremely difficult to communicate and added value message while discounting. Some leaders tell me that its different customers…that some only buy on mark down. I’m not convinced this is sustainable. Too many retailers try to please too many customers simultaneously and as a result, don’t really please anybody. Have confidence in your offering. Don’t discount outside seasonal clearance. Without this you cannot have genuine brand and price integrity aka trust. And without trust you are not going to be a player in this market for too long.

** We advise retailers on strategy and analytics. We also track promotional activity across the UK’s key retailers. Get in touch for details admin@richardtalksretail.co.uk

Those that apparently know these things tell us that interest rates will go up next week. This should be worrying, not simply in and of itself but because of what it says about how out of touch with reality so many elements influencing and running our economy really are.  First, the consumer economy is far more fragile than seems to be believed. Recent months have seen many case of ONS data being wrong across the economy. I have been warning about dodgy retail sales data from the ONS for far longer. These data paint a picture of buoyant spending which I have yet to see reflected in either results or anecdotal evidence from leading companies.

Only theoreticians could think “…one quarter of a percentage point wont make any impact on household budgets”. The public react on an emotional, not a statistical, level. Many consumers with debt today only know rock bottom interest rates and their already fragile confidence will certainly be impacted. They may be able to trade down to avoid inflation in shops but doing this with their debt is another matter.

Interest rates are usually increased when economies are overheating, when demand is rising and helping to increase inflation. Our economy is slowing. The worst of inflation will be falling out of the equation in the coming months. Real incomes remain weak, hence so too is demand. Hitting already wafer thin confidence with a message of further squeezes on household budgets is guaranteed to adversely impact retail sales.

** We advise retailers on strategy and analytics. We also track promotional activity across the UK’s key retailers. Get in touch for details admin@richardtalksretail.co.uk