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Economy

Why Black Friday Makes No Sense In Britain

Neither Thanksgiving nor the Friday after is a day off for British workers-shoppers. But there are even more reasons that the imported retail ritual is pointless.

Going fast in London?
Going fast in London?
Andrea Felsted

LONDON — British retailers are trying to go cold turkey on Black Friday. The trouble is, they just can't seem to kick the habit.

Black Friday first crossed the Atlantic six years ago, when Amazon.com Inc. began offering discounts in Britain, and domestic retailers quickly followed suit.

Since then, Britain's Black Friday has grown exponentially. By last year, 44 percent of consumers surveyed by Verdict Retail, a research group, participated in either Black Friday or Cyber Monday, the discount event coinciding with what was for many years the last date to order online for delivery by Christmas.

Retailers have always peddled special offers over the last weekend in November, which frequently coincides with pay-day, as they fight for holiday shoppers. Black Friday promotions may be less effective because retailers have already been discounting heavily

But the escalation of this into a week-long discount frenzy makes no sense. It's not as if Brits are taking the day off after Thanksgiving. For non-food retailers, the fourth quarter can account for almost half of annual profits, so selling goods they would have probably shifted anyway, but at a reduced price, is pointless. Retail margins aren't exactly bloated in the first place.

In the age of online retail there's even less rationale for offering discounts to lure people into shops. Last year customers turned away from what had become "Black Eye Friday," with battles in shops for cut price TVs.

Blanket discounts invariably means best sellers move faster. But returns can be up to 50 percent, as people buying for themselves purchase several sizes of a garment to work out the best fit at home, and return the rest over the next three to four weeks.

The time it takes to get stock back on the shelves or available online means they won't be there before Christmas, and will end up in bargain bins after the holiday. That's a big loss of potential profit.

This year, a band of retailers have decided to ditch Black Friday altogether. These include Wal-Mart Stores Inc."s Asda, an early adopter of the event. About 25 percent fewer chains are participating as of the start of this week, according to Richard Hyman, an independent retail analyst.

But some retailers are going full-throttle, as the threat from Amazon hasn't gone away -- and Gadfly has argued that the period may even represent an opportunity to challenge the giant. Dixons Carphone Plc and J. Sainsbury Plc's Argos all plan for the event long in advance and draw on the support of their big suppliers to provide discounts. Tesco Plc, Britain's biggest retailer, may do the same.

Delivering the goods in Somerfield — Photo: Sludgegulper

Tesco's an example of the cost of Black Friday -- it wants to double profit margins by 2020, and given that they're notoriously thin in categories such as electricals, the mark-downs are still probably ones it could do without.

And even in the U.S., there's already evidence that the event -- at least in physical stores -- has its limits. American electronics, apparel and toy retailers have little choice about whether they should join in -- 15 percent of holiday sales occur during Thanksgiving week, according to the National Retail Federation.

But a recent move to open on Thanksgiving Day didn't make sense for a number of retailers, who weren't attracting the crowds to justify keeping their stores open. Costco Wholesale Corp., Nordstrom Inc. and T.J. Maxx parent TJX Cos. Inc. won't open on Thanksgiving Day. People can order online, anyway.

Black Friday aside, Christmas is likely to be a decent one for U.K. retailers. Neither Brexit nor faster inflation has really hit the shops yet. In fact, the prospect that food and fashion prices could rise next year -- they could climb up to 5 percent -- may encourage some shoppers to buy now before prices go up later.

Conditions in Britain will undoubtedly be more difficult in 2017. So if retailers haven't got their addiction to the discounting drug under control this Black Friday, they need to go into rehab in time for next year.

--With assistance from Gadfly's Shelly Banjo.

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The Weight Of Trump's Indictment Will Test The Strength Of American Democracy

The U.S. legal system cannot simply run its course in a vacuum. Presidential politics, and democracy itself, are at stake in the coming weeks and months.

The Weight Of Trump's Indictment Will Test The Strength Of American Democracy

File photo of former U.S. President Donald Trump in Clyde, Ohio, in 2020.

Emma Shortis*

-Analysis-

Events often seem inevitable in hindsight. The indictment of former U.S. President Donald Trump on criminal charges has been a possibility since the start of his presidency – arguably, since close to the beginning of his career in New York real estate.

But until now, the potential consequences of such a cataclysmic development in American politics have been purely theoretical.

Today, after much build-up in the media, The New York Times reported that a Manhattan grand jury has voted to indict Trump and the Manhattan district attorney will now likely attempt to negotiate Trump’s surrender.

The indictment stems from a criminal investigation by the district attorney’s office into “hush money” payments made to the adult film star Stormy Daniels (through Trump’s attorney Michael Cohen), and whether they contravened electoral laws.

Trump also faces a swathe of other criminal investigations and civil suits, some of which may also result in state or federal charges. As he pursues another run for the presidency, Trump could simultaneously be dealing with multiple criminal cases and all the court appearances and frenzied media attention that will come with that.

These investigations and possible charges won’t prevent Trump from running or even serving as president again (though, as with everything in the U.S. legal system, it’s complicated).

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