Make or break: Why retailers are white knuckling it this Black Friday

Under pressure retailers desperately need a strong selling season with many facing drastic decisions about the future if their bottom line isn’t dramatically boosted, writes Scott Langdon.

On Friday, many Australians at work will have 20 web browsers open trying to purchase as much as possible for as cheap as possible.

It is a day of excitement and intensity of attempting to get the best deal on a microwave, golf balls, linen or to stock up on day-to-day essentials like toilet paper and toothpaste.

Or alternatively lining up for hours in the car to get into the local DFO for massive bargains and then to run around the centre until exhaustion and claustrophobia gets the better of you.

Like the scenes of Boxing Day sales a decade ago.

How shopping and retailing has changed!

Those emotions are incomparable to the feelings that retailers are feeling about Friday.

In short, retailers are crossing everything and hoping that Black Friday brings strong sales and good margins because they are desperate for it.

It is the official start of the selling season and never been more important.

Retailers desperately need a bumper selling season. Picture: Patrick Woods.

While retail has always been a challenging craft and subject to many uncontrollable external factors – such as high competition, increasing taxes, comparable high labour costs, cheaper overseas product and the economy at large to name a few – 2025 has been a year that is a massive outlier in difficulty.

The headwinds of uncertainty on interest rate movements (no reductions in 2026 according to CBA), supply chain challenges, inflation on stock acquisition, sustained low customer sentiment, a pricing race to the bottom and the unrelenting increase in business running costs.

The counter to that position is that Baby Bunting’s share price has risen more than 60 per cent in 2025 and Harvey Norman’s by about 55 per cent.

Shopping centres are expected to be full over Black Friday weekend. Picture: Patrick Woods.

Is that because retail is doing fine and the above is a ‘bad read’, or is it similar to many industries in turbulent and challenging economic times, that the strong get stronger, and are ultimately more resilient?

ASIC released its insolvency data for FY2025 and retail insolvencies have risen by 20 per cent from FY2025.

Or consider once legendary retail precincts in Chapel Street, Prahran, or Italian Forum in Leichhardt are now ghost towns with many closed shops.

The retail challenge is significant and we are not close to the bottom.

The challenge is that turning around a retail business is like trying to save the titanic with an ice-cream container.

Why? The external factors, or the uncontrollables, have far greater weighting on a retail turnaround than the controllable factors.

Retailers are good businesspeople; very good.

They have already done everything within their power to reduce costs, increase efficiencies with staff, renegotiate with suppliers and creditors and enhance online strategies, all while working an 80-hour week.

From here, more cost-out measures are now just iterative, immaterial and don’t move the dial. Retailers need a revenue-generated turnaround – the hardest kind.

To turnaround a retail business through increased sales, while maintaining margin, is extraordinarily tough.

So the question then is, how do you drive customers to your store or your website and then increase the probabilities of transacting?

Reduce pricing; done that; any lower and it’s not worth being in business.

Enhance the online experience; tried that; now we need more capital to further enhance, which I don’t have.

Get influencers to support the product; we’re not that sexy or they cost too much.

Better social media strategies – what did we say about the stronger getting stronger?

Under pressure retailers will be forced to make tough decisions in the new year if their bottomline isn’t boosted. Picture: Jake Nowakowski

It’s tough and if anyone says it is easy and can be done quickly, run away from their advice.

Google ‘Revenue Generated Turnaround’ and work out what advice you would provide to a retailer in the current arctic climate.

Not too many inspiring answers there for high-quality and experienced retailers.

Which is why retailers are white knuckling it for Black Friday and the December selling season.

The revenue-generating strategies they have developed throughout the past year will either hit or miss over the next six weeks.

It’s the grand final for retailers and I hope that the effort will be rewarded with strong sales while maintaining margins and that the sales are strong enough to pay out creditors and provide a fighting fund for the year ahead.

If retailers do not have a successful next six weeks, early 2026 will be a time of big choices. Retailers will need to either regroup and strategise to go again for 2026, or give into the continuing momentum and pull up stumps.

Let’s hope it is the former because our economy needs strong retailers and retailers are the heart and soul of the entrepreneurial spirit of Australia. It cannot be lost.

Scott Langdon is a restructuring partner at KordaMentha