Has Black Friday brightened the retail sector?
Millions might have bagged bargains over the weekend but will it fuel bigger profits and benefit investors?
2 min read
Black Friday and Cyber Monday have brought retail back into the spotlight. UK shoppers are expected to spend over £2,000 each online alone this month and next, according to Adobe research.
But big sales aren’t as important as the big picture when it comes to investing. And with major stores struggling and technology taking over, we think retail needs more than a short-term spending spree to get back on track.
Look a little more deeply, however, and you’ll find there are sectors benefitting from the changing face of shopping.
Few opportunities in retail
Our analysis shows that retail presents few investment opportunities at the moment – and all the Black Fridays and Cyber Mondays in the world are unlikely to change that.
Richard Way, Coutts UK and European Equity Specialist, explains, “The retail sector is going through a huge period of transformation and will continue to do so for some time. We believe that makes it an unattractive sector for investing, at least for now.
“Just because a retailer may report large seasonal sales volumes, that doesn’t necessarily translate to profits. In many cases competitive pressures force retailers to offer significant discounts just to keep customers loyal, and not just over the Black Friday weekend.
“Promotional activity will continue well into January – good for attracting customers but not necessarily good for the bottom line.”
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