Cost-of-living crisis casts shadow over Black Friday across Europe
2022-12-16 15:55:00  

LONDON -- Retailers across Europe usually experience high footfall in the Black Friday shopping frenzy but as this year surging prices have eroded real wages and reduced living standards, consumers tend to stay more cautious about their spending.

Lily, a customer in the United Kingdom (UK), told Xinhua that she had to scale back her shopping plan in light of the high inflation rate. People "hold on to their money a little bit more" and are "a bit more cautious with what they're buying nowadays, especially since Christmas is round the corner," she said.

Inflation in the UK rose by 11.1 percent in October, hitting a fresh 41-year high. After taking inflation into account, average regular pay fell by 2.7 percent between July and September, the largest fall in growth since comparable records began in 2001, according to the Office for National Statistics (ONS).

Amid the worsening cost-of-living crisis, UK consumer confidence in November still neared historic lows after it touched bottom in September, surveys conducted by the market research company GfK showed.

"Retailers are desperate for some spending cheer but the worry is that it could turn out to be more of a Bleak Friday," analyst Susannah Streeter at financial services company Hargreaves Lansdown said.

Though spending in the UK is still expected by some researchers to increase by around 0.8 percent over the weekend, including on Black Friday and Cyber Monday, this figure masks the impact of inflation on volumes, Streeter said. "Creeping prices mean that we may put fewer items into trollies and virtual baskets."

As of Friday noon, shopper numbers at UK retailers were more than 22 percent below 2019 pre-COVID-19 pandemic levels, according to data provider Springboard.

"I would say, at the moment, the challenge facing retailers is probably even tougher than they faced during a pandemic" because consumer confidence and the cost-of-living crisis are so dominant in people's minds, Andrew Goodacre, chief executive officer at the British Independent Retailers Association (Bira), told Xinhua.

"We've seen retail sales drop in October and September and that will put pressure on Black Friday being as successful as in previous years. The problem of weak consumer demand is a real threat to high streets up and down the country," Goodacre added.

Across Europe, the outlook is not rosy either. Inflation runs high. The energy crisis may last beyond winter. Recession is on the horizon. All these are weighing down consumers, dealing a huge blow to household budgets and casting a cloud over shopping events.

"We already started the promotions at the end of October and the beginning of November, because we see that we need a longer period of sales," Miha Drganec, sales manager at the Big Bang Electronic Store in Ljubljana, told Xinhua.

The outlook for traditional winter sales in the eurozone is subdued this year and any boost will not be enough to prevent consumer spending from contracting in the fourth quarter, Tomas Dvorak, a senior economist at economic advisory firm Oxford Economics, said.

Gloom is also expected to hang over Europe through Christmas. "Consumers are unlikely to splurge during the Christmas sales and are much more likely to get thrifty. Similarly, retailers' assessment of current and expected business conditions heading into the festive season has been bleak," Dvorak added.

No quick improvement is in sight. Inflation is expected to decline in 2023 but will likely remain high at 7 percent in the European Union and 6.1 percent in the eurozone, statistics showed.

"I think it's important also to keep your life going but still maybe save on something that is not a necessity, that you do not really need right now. And then hopefully inflation will stop rising, and we can all return to a bit more normal life," Steffen Nielsen, a customer in Copenhagen, told Xinhua.