Christmas business: Black Friday is no longer on the agenda

Tue 29th Nov, 2022

It looks as if there has been a fundamental shift. Not only in the city centers, but especially there. People are clearly shopping in the high streets much less often than they used to. Even before Christmas, they are no longer drawn there as much. Stefan Genth, CEO of the German Retail Association (HDE), believes he can pinpoint the exact moment when this change occurred: "With the pandemic," he says, "customer frequencies plummeted" and "visitor numbers have not recovered to date.

Christmas sales were already disappointing for many brick-and-mortar retailers in 2021. However, for completely different reasons: A year ago, stores could only be entered vaccinated, tested or recovered, and with a mask; 2 or 3-G rules prevailed, with slight differences from state to state. The HDE criticized this heavily because they feared the consequences. In the meantime, that all seems to be a long time ago.

Nevertheless, even now before Christmas, many retailers are disappointed. This time, because many consumers are saving in the face of high inflation and have changed their shopping habits during the Corona pandemic. According to an HDE trend survey of 400 businesses, 60 percent of downtown retailers are dissatisfied with customer foot traffic. Retailers of consumer electronics, cosmetics and groceries excluded. That doesn't necessarily bode ill for sales overall. A year ago, many consumers shifted to the Internet and ordered online. Total retail sales were therefore strongly up in 2021.

But even that may be different this year. Because of the high rate of inflation, an increase in sales can mean a real minus. And at least for the last two months of this year, the HDE is assuming exactly that. There is also much to suggest that German citizens will not shop online to the same extent this year as in 2021. According to the online retail association BEVH, sales were already down in the first few months of this year.

About how much consumers used the promotional days around Black Friday this time, the data is ambiguous. Based on its data, financial services provider Mollie claims to have measured that Germans would have spent 15 percent more at small and medium-sized online retailers. The information service provider Experian, on the other hand, found that this year's Black Friday, unlike in previous years, was not the strongest sales day of the year in German online retail. The basis for this was the evaluation of 500,000 transactions on the campaign day. This "only" revealed an increase in sales of 156 percent compared to the annual average, compared to an increase of 238 percent in 2021. According to Experian manager Renate Oldenburg, buying behavior is "equalizing". Consumers spend more money at some retailers on the days before and after Black Friday than on the discount day itself.

The comparison portal Idealo found in a survey that many consumers, however, often deceive themselves about the savings achieved on the bargain days. The majority of German consumers assume that they will save between eleven and 20 percent on Black Friday. On Black Friday 2021, however, the average saving was actually just five percent.

Klaus Wohlrabe, head of surveys at the Ifo Institute, points out that the campaign days could also be deceptive for retailers, especially this year. Namely, if many consumers stock up on Christmas gifts now and then practice abandonment in December.

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