Coming to a shop near you: The great Black Friday bluff

How to handle the event presents a strategic challenge for retailers, writes James Moore – do they drop prices to rock-bottom or try to avoid the sales completely?

For shops, it’s a case of damned if they do and damned if they don’t (AFP)

We’re now just seven days away from Black Friday, an event most retailers would probably admit to calling something less polite away from prying eyes and ears. When it comes to taking part in this least welcome of American imports, they’re really damned if they do and damned if they don’t.

How to navigate it – Black Friday lasts for the best part of a week or more in most cases – leaves Britain’s retail gurus on the horns of a strategic dilemma.

They either offer a bunch of ker-azy deals and sacrifice their already wafer-thin margins in the hope of tempting a wave of shoppers to bail them out, or they shun the event and get killed in the aftermath.

That’s more or less what happened last year to online fashion retailer Asos. The subsequent profit warning was brutal and so was the City’s reaction to it. This year promises to be different. Good news, I suppose, if you want some new threads and think the planet can, you know, take one for the team.

Of course, as savvy shoppers are learning, some retailers have cottoned on to the idea of taking part by not taking part. They offer a bunch of savings that aren’t anything like as good as they look. They then pepper social media with ads, fill journalists’ inboxes with press releases and hope no one notices that they’re wearing the emperor’s new clothes. It’s the great Black Friday bluff.

There are supposed to be rules to protect the consumer from this sort of thing. But with so much going on, who’s going to notice if one or two of the participants play fast and loose with them? Or, more likely, make a big fuss about knocking a fiver off the price of a £500 flatscreen TV that’s an end-of-line model they’re trying to get rid of anyway.

When it comes to that sort of product, lots of retailers advertise sales every couple of months anyway. There’s no reason to pay top whack for electronic devices unless you’re determined to do so.

In that respect, Black Friday is, I suppose, as good a time as any to buy. It is, however, an even better time to exercise your search skills so as to check out whether the super-duper, lightning bargain that’s caught your eye is all it’s cracked up to be.

I suppose you can’t really blame retailers for trying to be cute. The economy is rubbish and the government’s plans will make it worse. Retailers operate in a brutally competitive business. Lots of bricks-and-mortar outlets are barely profitable, if they make any money at all. Every few months, one or another of them goes to the wall as they try to deal with those issues, not to mention the gorilla in the corner named Amazon. It pays tuppence ha’penny in corporation tax (legal but immoral) and places its facilities out of town where property is cheap and business rates are low (just good business). Combined with a buying power no one can match, it’s Liverpool FC competing in a Premier League that’s mostly made up of Accrington Stanleys, with the stiffest competition coming from the occasional Preston North End.

Still, retailers would be unwise to overdo it. Every writer worth their salt will be telling their readers to look before they leap. If enough of you take note, City analysts will have some uncomfortable questions for retail CEOs when they put their trading statements detailing how much of the billions we’re expected to spend they’ve collared.

Black Friday comes but once a year, but every day is gloomy on planet retail and it doesn’t look like that’s changing for the foreseeable future.