Nationwide predicts 20% drop in Black Friday transactions

Nationwide Building Society is predicting a 20 per cent slump on Black Friday purchases compared to last year as the nation waits for retailers to open from lockdown on 2 December.

The building society said that spending for the 27th November discounting event is likely to be suppressed by ongoing lockdown restrictions, and is set to see year on year spending fall for the first time since the shopping event started a decade ago.

Using current debit card spending data to predict consumer behaviour, the UK’s largest building society forecast that its members are 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.

Brits will spend an average of £172 on Black Friday and £160 on Cyber Monday, according to consumer research commissioned by Nationwide. Despite many stores being closed, a third (37 per cent) say that they plan to spend more this year.

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 building 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).

Nearly two thirds (63 per cent) 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 per cent) using it as a chance to get discounted Christmas presents.

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 per cent) of people on both Black Friday and Cyber Monday.

The other main places to shop include electrical retailers (30 per cent), department stores (29 per cent), clothing stores (28 per cent) and online marketplaces such as eBay and Facebook Marketplace (23 per cent).

As a result of many shops being closed due to the pandemic, more than six in ten (62 per cent) of 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 per cent), they can shop when they want (44 per cent), they can use discount vouchers (35 per cent) and many feel there is a better choice online (33 per cent).

Additionally, 16 per cent of shoppers said that the requirement to wear a mask put them off shopping in store.

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,” he added.

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