US to increase spending, Europe to hold back due to cost-of-living crisis

Many shoppers say they plan to spend less this Black Friday due to the cost of living crisis.

Richard Baker | In pictures | Getty Images

Black Friday may offer a bargain opportunity ahead of the holiday period, but many shoppers will expect retailers to cut prices by a wide margin this year as they tighten their belts amid a deepening cost-of-living crisis.

Shoppers in Europe plan to spend nearly one-fifth less during this year’s annual discount period as inflationary pressure weighs on consumer sentiment. Boston Consulting Group study this month.

UK consumers will cut their spending by the largest margin in the region, spending 18% less, while France and Germany plan to cut their spending by 15% and Spain by 13%.

US consumers were the only ones in a survey of nine countries, which also included Australia, to say they expect to spend more this year, increasing their spending by 6%.

Retailers under pressure

What we have seen is the spread of the Black Friday trend.

Christy Morris

Managing Director Commercial Solutions, Barclays Payments

“Black Friday is a vital moment on the shopping calendar for physical and online retailers who are still recovering from the Covid pandemic and are now facing consumers in many markets who are cutting their spending plans on many non-essential items.” — Jessica Distler, Managing Director BCG and partner, the report said.

This could lead retailers to extend their discounts throughout the month, increasing shopping opportunities for consumers who have money to spend.

Growing risk of shopping fraud

Transactions in the UK rose 3.8% year-on-year in the week leading up to Black Friday, according to new data from Barclays Payments, one of the country’s leading payment processors.

Christy Morris, managing director of commercial solutions at Barclays Payments, told CNBC on Thursday that this could mean shoppers are more inclined to spread their purchases over the Christmas season.

“What we have seen is the spread of the Black Friday trend. We saw this spread within a week and even further within a month,” Morris said.

“Some of it has to do with the potential to draw attention to Christmas shopping and consumers are thinking about being smarter about how they can spend at Christmas,” she added.

However, experts are urging shoppers to exercise caution when trying to take advantage of discounts this holiday period.

John Davies, UK and Ireland director at cybersecurity organization Sans Institute, said online hackers have been known to “turn up the heat” during discount periods, especially when shoppers are forced into a deal.

Indeed, according to Barclays research, shopping scams are up 34% since last year’s Black Friday and Cyber ​​Monday weekends.

“Cybercriminals are aligning with attacks that are more common, more sophisticated and harder to detect than ever before,” he said.

Davis urged consumers to be especially vigilant when shopping online and avoid making hasty or panicky decisions out of “fear of missing out.”

“Adventurous hackers will try to create a false sense of urgency, so it’s important to be careful about being aware of fraud, trusting your intuition, and building security into all of our online behavior,” he added.

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