Black Friday is just bad business. The economics are cracked.

You pull your profit margin down. You pull your baseline down. You train customers to wait for a sale. And there’s no evidence it builds brand loyalty.

Halo? Negligible, most of the time. Maybe you’ll get an article in The Sun if two wallies wrestle over a discounted Nintendo Wii.

You harvested the crop too early; now you’ll starve over winter. Plain. Simple. Racket.

I’ve seen it first-hand. But to alleviate any doubt, here is the evidence, so you can make an informed call for your brand or your agency’s client.

  1. Discounts crush profit unless volume explodes. Across 26 categories and 86 stores, everyday-low-pricing lowered profits in 18 of 18; Hi-Lo raised profits in 17 of 18.
  2. Baseline sales weaken with heavy promotion. Promotions lift short-term sales but reduce baseline demand, raise price sensitivity, and erode future promo impact.
  3. You train customers to wait for deals. Long-run data show consumers become more price-driven under sustained promotions.
  4. The loyalty myth. A meta-analysis of 51 studies finds no average lift in post-promotion brand preference.
  5. Better at footfall than loyalty. In P&G’s “value pricing” experiment, deals and coupons boosted penetration but not retention.
  6. The spike is borrowed from the future. Static analyses overstate elasticity by about 30% due to stockpiling and purchase acceleration.
  7. Post-promotion dips are real. Scanner data show 4-25% of the “bump” evaporates after the promotion ends.
  8. Halo is small and selective. Cross-category spill-overs are limited; within-category effects dominate.
  9. Same-week revenue can pop, but it misleads. Average price elasticity across 1,851 cases is −2.62. Units jump when you cut price, but profit and multi-week revenue fall once you net out margin loss and pull-forward.

The exceptions

There are times it makes sense:

  • To clear perishables or short-life stock.
  • To fill spare capacity (hotels, gyms, events).
  • To encourage first-time trial, if you can upsell or cross-sell later.
  • To re-activate dormant customers, with a follow-up retention strategy.
  • To rotate seasonal or warehouse stock.

General wisdom

In the words of my former partner-in-crime and current good pal Ritchie Mehta, in a recent conversation at the pub: “The future of every marketing agency depends entirely on the economic outcomes of its clients.”

In the words of the great Les Binet: “Don’t optimise ROI, optimise net profit. The optimum ROI budget is always zero. If you optimise ROI you will destroy your business.”

And in the words of my mother: “If all your friends were jumping off a cliff…”