Looking at the survey figures and at neighboring countries where big retailers have already started Black Friday, we see a paradoxical trend. While all economic figures indicate that inflation has depleted savings (see “Workers Look to Keep Existing Jobs Amid Gloomy Fall News,” from the Oct. 6 print issues of the Budapest Business Journal), planned spending on Black Friday remains healthy.

That is because customers are scheduling the purchase of high-value but not immediately necessary products for periods like Black Friday or the New Year sales, when they expect significant price cuts, or at least greater than inflation.

A survey conducted by market research companies Reacty Digital and Shoptet indicates that three in every 10 Hungarians have been postponing purchases, hoping for price cuts on Black Friday. Many more, 50% of them, use price comparison sites to find the best offers and check against the previous prices of the same item.

This year, almost half (45%) of Hungarian adults say they plan to shop on Black Friday, with a budgeted amount of HUF 43,000 (about EUR 114 or USD 124 at the time of writing), slightly more than last year. Respondents were also asked about specific items they plan to buy, and they mostly indicated clothing (35%), household and chemical goods (30%), and household appliances of all sizes (26%).

Retailers are preparing for much lower sales in Hungary compared to 2022 when income tax refunds massively boosted consumption. During a recent press event, Gábor Szilágyi, the CEO of electronics retailer Media Markt Hungary, said that since June, the technology market has collapsed, and September figures show that sales are more than 10% behind last year.

Energy-saving

The soaring energy prices forced clients to invest in energy-saving appliances. Given that these will not be replaced for several years, Media Markt does not expect high sales in this segment in 2023, even in the Christmas period.

The company expects the market to shrink until mid-2024 or stagnate at best. That is bad for the business, given that inflation raised costs in all areas: marketing, logistics, energy, and, significantly, HR. This is forcing Media Markt to look for new income sources by expanding customer services.

In neighboring Romania, retailer eMag surpassed all previous sales records in its Black Friday event, held early on November 10. Before the action, the company estimated sales would top around RON 680 million (about HUF 51.4 billion). The actual figure was RON 730 mln (HUF 55.2 bln).

On average, clients purchased 4.8 items and spent RON 1,367 (around HUF 103,000) per client. This is more than double the estimate of the average spending on Black Friday in Hungary. While this might seem reckless, surveys conducted before Black Friday in Romania indicated the contrary: 17% said they knew exactly what they wanted to buy, and 28% had a general idea, representing almost half (45%) of those surveyed.

Romanians also seem to have prepared with a pre-established budget, with 42% saying they would make purchases strictly within this. In the end, the highest-grossing categories were drinks, groceries and pet food; perfumes, personal care and beauty; toys and children’s products; and home appliances of all sizes. Interestingly, the once most popular categories, smartphones, laptops, IT-related items, TV and other technology products, ranked much lower.

The Hungarian Story

In Hungary, eMAG will hold Black Friday one week later than in Romania today (Nov. 17). The company has not published sales estimates. The Hungarian survey conducted Oct. 17-27 showed that 50% of the respondents would allocate between HUF 30,000-100,000, 19% between HUF 100,000-220,000, and slightly above 10% between HUF 15,000-30,000 and above HUF 220,000.

The most popular categories, according to the answers, will likely be clothing (30.6%), electronics and car accessories (19.9%), shoes (17%) and small home appliances (16.7%). Of all respondents, 20.4% plan to make a purchase on Black Friday, which seems a low figure, given that 91% are familiar with the now traditional sales discounts.

Boston Consulting Group also measured the visible appetite for Black Friday shopping worldwide. Not surprisingly, the spending budgets are set significantly higher than in Hungary and Romania, at between USD 380-390 in the United Kingdom, Germany and Switzerland, USD 310 in Canada and Poland, and, highest of all, USD 460 in the United States.

But discipline is also the highest priority: in the past three months, more than 50% of those surveyed in these countries have cut back on non-essential purchases, somewhat fewer compare prices more frequently, while 41% buy more based on deals and promotions.

Consumer electronics are still one of the most favored product categories, but interest in these has fallen sharply since 2022, BCG says. Instead, more budget will be directed to “basic or essential products I need anyways” and “low price products because I don’t want to spend a lot of money.” When asked what would qualify as a “good deal,” consumers expect at least 30% off.

This article was first published in the Budapest Business Journal print issue of November 17, 2023.