Nationwide Building Society is predicting that Black Friday purchases will be down by a fifth compared to last year as the nation waits for retailers to open from lockdown.
It would mark the first time the Society has seen a year-on-year spending drop on what has become one of the biggest shopping events of the year since it started in the UK around a decade ago.
Using current debit card spending data to predict consumer behaviour, Britain’s biggest building society forecasts that its members are still expected to make more than six and a half million transactions on Black Friday – up to a 20 per cent drop compared to what the Society had previously forecast. Prior to the announcement of a second national lockdown in England, Nationwide had been expecting its members to make nearly eight million transactions on Black Friday, which would have been a 12 per cent increase on 2019 and would have given a welcome boost to struggling retailers.
Assuming transactions decrease as forecasted, the Society’s members are set to spend around £224 million on the day compared to £247 million last year – still equivalent to £155,500 a minute (£171,000 a minute in 2019).
Black Friday and Cyber Monday - the consumers’ view:
Consumer research commissioned by Nationwide at the outset of the second lockdown in England reveals the average Brit expects to spend £172 on Black Friday and £160 on Cyber Monday. Despite many stores being closed, a third (37%) say that they plan to spend more this year.
Nearly two thirds (63%) of people say that they have delayed purchasing items in order to snap up a bargain on Black Friday or Cyber Monday, with half (51%) using it as a chance to get discounted Christmas presents. However, it isn’t all about gift giving, with 41 per cent wanting a discount on something for themselves.
Despite the Amazon Prime Day taking place last month, Amazon and other online only retailers maintain top spot to shop for six in ten (59%) of people on both Black Friday and Cyber Monday. The other main places to shop include electrical retailers (30%), department stores (29%), clothing stores (28%) and online marketplaces such as eBay and Facebook Marketplace (23%).
As a result of many shops being closed due to the pandemic, more than six in ten (62%) shoppers were already planning to change how they had shopped in previous years and buy online. As well as concerns about Covid-19, the main reasons many are switching to shopping online are that it is easier (47%), they can shop when they want (44%), they can use discount vouchers (35%) and many feel there is a better choice online (33%). Additionally, 16 per cent of shoppers said that the requirement to wear a mask put them off shopping in store.
Act in haste, repent at leisure:
The majority (72%) of Brits admit that they may make impulse buys this year, with the small window to get discounted items potentially leading to rushed decisions. More than a fifth (21%) have had to return goods bought previously on Black Friday or Cyber Monday. There is significant regional variation regarding those returning goods, with those in Greater London more than three times as likely to do so compared to those in the East of England.
| Region | Percentage returning goods |
|---|---|
| Greater London | 37% |
| Yorkshire and Humber | 33% |
| West Midlands | 24% |
| Scotland | 20% |
| East Midlands | 19% |
| South West | 19% |
| Wales | 19% |
| North West | 18% |
| Northern Ireland | 17% |
| South East | 14% |
| North East | 14% |
| East of England | 12% |
Mark Nalder, Head of Payments at Nationwide, said: “Spending had begun to return back to normal levels in the weeks preceding the second lockdown. As a result, we were expecting Black Friday transactions to exceed last year by a margin of around 12 per cent. However, tighter restrictions mean people are being understandably cautious and many, particularly those who enjoy getting to the shops and stores, will likely wait until stores are back open again before making their big pre-Christmas purchases meaning we expect the number of transactions to drop by up to 20 per cent on what we had previously forecast for this year.
“The run-up to Christmas is the peak spending period of the year and it’s easy to lose track of how much we’re spending. Nationwide is focused on delivering products and services, which put members in control of their money at every step. That is why we’ve recently launched a pending transactions feature on our mobile banking app, which means members will be able to keep track of both the purchases they’ve made and how much they have spent while they continue to shop.”
