Weakening retail sector enters Black Week with mixed feelings
Published: Friday, Nov 22nd 2024, 10:50
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Want a new TV at half price? In the current consumer environment of rising living costs, many people may be hoping for a bargain. This year's Black Friday comes at a time of subdued spending and is therefore all the more important for the battered Swiss retail trade, which is currently experiencing turbulent times.
Migros is selling off entire parts of its business, Jelmoli will soon close for good and the Weltbild publishing house is history. And those that are still around don't have it easy: "Swiss retailers are under pressure. Procurement, logistics and energy costs are rising and it is difficult to pass these costs on to customers," explains Benjamin Gietzendanner, Head of Retail at the consulting firm BearingPoint.
Retailers are therefore bearing some of the costs themselves and margins are suffering as a result. "However, as everyone is in the same boat, we can expect prices to continue to rise, albeit not to the same extent as in the last two years," says Gietzendanner.
Brick-and-mortar retail suffers
And the prospects for improvement in the face of the Black Friday discount battle up to Christmas are not exactly rosy: "This year's Christmas business will probably suffer from a sustained negative trend," says Myriam Meier, retail expert at market research company GfK. Although some providers, for example in the sports sector, could see growth according to the expert.
"The rising costs of energy, rent, personnel and logistics are a challenge for our industry," confirms Claude Bucher, head of Ochsner Shoes. "We have to work on our range every day to amortize these costs," he explains. He sees improving products and services and "optimizing sales areas" as possible solutions.
Juliana Herriger, spokeswoman for Mediamarkt, says that some of the rising costs can be passed on to consumers. At the same time, however, Mediamarkt is trying to compensate for the costs through efficiency measures so that prices do not have to be raised too high and the company remains competitive. Although the consumer climate remains difficult, according to Herringer, she sees "the first signs of stabilization".
Discounts lose traction
"Because there are so many discounts during the year, customers think it's too expensive if they have to pay full price for a product," explains Gietzendanner. Retailers cash in on sales early thanks to the campaign days, i.e. not just towards Christmas. At the same time, however, they achieve lower margins. "Although Black Friday is still a highlight for many retailers, it has lost its luster, especially for smaller retailers," says the expert.
The extension of the promotional period from one day to a week ("Black Week") or even a whole month ("Black November") has also reduced the scope of the discounts. However, the discount period is still important for retailers. This is when the top products for the end of the year are identified and retailers can prepare accordingly, as Gietzendanner explains.
Higher budgets
If the Blackfriday.ch platform is to be believed, this year's discount battle is likely to be successful despite the gloomy consumer mood. "Although you see less advertising on the streets, consumers are still very interested in the bargains at the end of November," says Jérôme Amoudruz, Managing Director of Blackfriday.ch.
According to a survey conducted by the platform, more than half of consumers want to shop on the discount days. And the average budget of CHF 282 is higher than the previous year's figure of CHF 254.
Black Friday certainly divides opinion: almost half of those surveyed said they did not like Black Friday. The most common reasons given were that the discounts were not really good deals and that the impact on the environment was harmful.
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