Black Friday once represented a cornerstone of retail success, but in recent years, many small businesses have opted out, citing reasons like unsustainable discounts, increased competition, and the financial strain of price cuts.

This year, the sale begins on Friday 29 November and will conclude on Cyber Monday (2 December). For many large businesses, the sales period will go on even longer with some beginning up to a month before. While UK spending is forecasted to exceed £9bn** this year, small businesses often struggle to see Black Friday translate into meaningful profits.

Hiscox has spoken to small businesses across the UK to uncover why they are boycotting the Black Friday sales and focusing on other key dates instead, including the growing “Colour Friday” movement.

Small businesses feel “drowned out” by retail giants, making Black Friday “unprofitable” and “unsustainable”

A recent report revealed that 59% of UK consumers head straight to Amazon for their Black Friday deals, so it’s no surprise that small businesses feel excluded. Not only are larger businesses able to offer hefty discounts on products and maintain the price for a few days, but they are also able to put more time and money into spreading the word online – something many small businesses simply cannot afford.

Ali Lees, the Founder and Director of Inspired Styling, a personal styling and colour analysis service, says, “Black Friday has become so saturated and it’s likely many small businesses will get drowned out in the noise. Bigger businesses have huge advertising budgets and it’s just not sustainable from a profitability perspective for small businesses to offer huge discounts over an extended period.”

Speaking on profitability, Tom Bourlet, Head of Marketing at Hen Party Deals, a hen party package provider, said, “We have offered deals on Black Friday over the past decade but saw little impact on sales volume, meaning we were simply providing a discount for some customers.”

The company held a meeting in August this year when they decided to forego Black Friday this year, concluding that “In the end, we felt that the sales we made over Black Friday often came at a loss.”

David Horne, business growth expert and founder of Add Then Multiply, comments: “Large retailers often use Black Friday as an opportunity to unload excess inventory, but small businesses do not always have that luxury. With a smaller range of items to sell, many of them feel forced into discounting items that would normally generate a profit, simply to participate in the bonanza that Black Friday has become.

“My advice to small businesses is only to participate in Black Friday if they are in a position to unload excess stock to generate some positive cash flow, and that they should not offer discounts on newer or flagship products.”

Black Friday customers rarely return – unless it’s for a refund

Many small businesses rely on a loyal customer base, prioritising meaningful connections and ongoing trust between the customer and the business. While Black Friday is a great opportunity to bring in new customers, some small business owners are considering whether these customers will come back to the brand time and time again.

Tom Bourlet from Hen Party Deals commented, “The issue is that people looking for a deal on Black Friday don’t necessarily offer any brand loyalty, they simply want a good deal for a day. The type of customer might also not be your target audience.”

Tom continues, “Having worked with a beauty brand in the past, we offered big discounts around Black Friday and our refund numbers would shoot through the roof, as a lot of people who wouldn’t normally buy these products were drawn in by the deal, only to change their minds later. We would make a loss on delivery costs and issuing refunds, which was very frustrating.”
Deepak Shukla, CEO of Pearl Lemon, a digital growth agency also said, they “have participated in Black Friday in the past but found that the hype can lead to short-lived engagements, which don’t support the relationship-building essential to our brand and clients’ needs.”