The Black Friday sales have already started and they’re tipped to be larger than ever in Australia, but some businesses say it’s simply not worth the hype.
Australians are expected to spend a record $6.8bn over the Black Friday-Cyber Monday weekend, a 4 per cent increase from last year, according to market research firm Roy Morgan.
Deloitte reported participation among Australian retailers has grown by 3 per cent from last year, with 44 per cent expected to take part.
Chris Rodwell, CEO of the Australian Retailers Association said the four day event from November 28 to December 1 is a vital boost for retailers after “subdued consumer activity for the past two years”.
But multiple businesses have warned customers they won’t be offering discounts, due to the financials not stacking up.
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Women’s fashion label Jasmine Alexa notified customers it won’t be hosting a Black Friday sale for the first time, despite receiving multiple messages about it.
Founder Jasmine Gescheit said the “financial reality is sobering” for small brands with tight margins.
“When you offer 40 to 50 per cent off, then factor in production costs, shipping, packaging, wages, rent and all the overheads of running a business – you’re often left with nothing, or worse, operating at a loss,” she explained.
“What people don’t realise – those big brands have massive mark-ups built in specifically so they can discount.
“Black Friday is just four days of the year, but we’re building relationships that last 365 days.
“Why would we compromise our values, our sustainability, and frankly our financial viability for such a short period?”
Ms Gescheit added her brand previously participated in Black Friday “out of fear – fear of being invisible, fear of losing sales, fear of being left behind”.
“Black Friday has become a race to the bottom – who can discount deepest, who can start earliest,” she said.
“This year, some brands started their Black Friday sales in October.
“It’s become completely disconnected from conscious consumption and the actual value of what we create.”
The online brand will instead launch a pop-up shop for customers to shop in person in Melbourne, the weekend before Black Friday.
Ms Gescheit said businesses could get creative with workshops, collaborations or exclusive products, as ways to stand out during the period.
Lauren Henry, owner of Newcastle fashion and homewares store and cafe Common Circus said each year had become increasingly harder to run a retail business and she had felt “immense pressure to join in on the Black Friday sale bandwagon”.
In a social media post, she noted the Christmas period was the company’s “Superbowl” and it was when her staff would be working the hardest.
“When we discount our product, it’s taking away from our margin,” she said in a video.
“It impacts how many people I can hire and basically pay a wage for.
“We have 20 plus women in store that work for me and Common Circus, a big proportion of those have families of their own, they’re supporting their families as well.”
She also said discounting the store’s curated products would “devalue” the brands it represented.
Sunshine Coast cards, stickers and art store Lauren Sissons Studios similarly said it couldn’t compete with “huge discounts or six-week long sales”.
Gold Coast pyjamas label Homebodii had previously chosen to opt out of the Black Friday discounts but founder Ingrid Bonnor said this year it decided to host a “small” storewide sale, after hearing from customers who wanted to shop early for Christmas gifts.
It was a “way of saying thank you to our loyal customers for their continued support in what has been a challenging retail environment”, she said in a statement.
“At Homebodii, we’ve always focused on thoughtful, conscious shopping rather than the hype of discount culture,” she said.
Other companies have previously flagged that they wouldn’t offer Black Friday discounts in past years, including women’s fashion brands Spell, Twoobs and Ten Tones.
Roy Morgan has tipped about 6 million Aussies will hit the sales this year, with a quarter planning to save on Christmas gifts.
The average planned spending is $804 per person – $750 for women and $882 for men.
Afterpay reported 45 per cent of Australians were holding out for discounts on big-ticket items, mostly in clothing and shoes, toys, books and interiors and decor.
Mr Rodwell from the Australian Retailers Association said many consumers were bringing forward their Christmas shopping and it was a becoming a “major fixture in the Australian retail calendar”.
But he noted for some retailers, the sales may not align with their commercial strategy.
“November to December can be a make-or-break period for many in the sector,” he said.
“Peak season delivers the lion’s share of annual profit for countless discretionary retailers – particularly small and medium-sized businesses operating on tight margins.”
