Have you got Christmas wrapped up this year? It's not necessarily a given that stores and suppliers always get their acts streamlined enough to really make the most of the frenetic season. The weekend before is sure to see intense shopping, although it may be tougher to predict what will happen on Christmas Eve (this year it falls on a Monday).
Mistakes such as the old chestnut of out of stocks still happen, but there are also hard-to-pinpoint issues such as the best type of price promotions, and when they should be introduced. Planning ahead, based on previous experience, is the key, but a simplistic approach is to be avoided. Painstaking analysis of shopper habits, such as that being done by some of the big Christmas confectionery brands such as Bendicks and Cadbury, will help to provide advance insights.
Bendicks believes that shoppers are tending to leave their festive shopping to the last minute. With the recent mortgage crisis, tighter belts may mean the season will start later than retailers would prefer. Bendicks trade marketing manager Gabrielle Bond is encouraging retailers to plan fixtures early to avoid last-minute out of stocks caused by sudden demand peaks. She says: "Ideally retailers should place at least two sites in store, one for planned purchases in the boxed chocolate fixture, plus strategically placed impulse fixtures at aisle ends and close to checkouts."
Bond would naturally want to locate her company's product in as many locations as possible, but the need to merchandise for shoppers waiting to the last minute is key. "Boxed chocolates, in particular, are often last-minute purchases when shoppers realise they've forgotten a present for someone," she says.
Despite seemingly endless price promotions, and lower consumer confidence, Christmas is when consumers will shell out for something a bit special for themselves and their family. Bendicks asserts that premium confectionery did well last year, with its After Dinner Mints up 8% in value sales [ACNielsen Scantrack 16 weeks to 30.12.06].
Cadbury Trebor Bassett is also feeling festive, although the firm is aware of the challenges. It's the market leader with a 24% share, despite suffering a value sales drop last year of £5.9m ACNielsen Scantrack 17 w/e 30.12.06. According to the company's 2006 research among shoppers in Tesco, Sainsbury, Asda and Morrisons, while price does play a role in their decision-making, "promotions are not driving footfall for retailers". Cadbury says that 54% made their decision based on "who the product is for" whereas 21% bought because of a multibuy and 18% because of a money-off promotion. Following its research, Cadbury has put the emphasis on several segments within Christmas confectionery, notably Novelties with the re-launch of its Snowman, aggressively combatting Lindt's more premium-priced Reindeer, which Cadbury admits is driving the growth in this area. Novelties is the second-biggest segment, and the fastest-growing at 6%. No surprise then that Cadbury introduced Magical Elves, which include 'popping candy'.
Mars is the number two player in the traditional Christmas market, behind Cadbury. In what was a "flat market" in 2006 the company managed to grow value sales by 2.4%, driven by Tubes and Branded Gifts. It is advising retailers to stock up on its new 'self-eat' Mistletoe Kisses from September and "benefit from sales right through the season". A £1m media spend (including Mars' first TV campaign for a Christmas product) ought to provide the expected demand spike in October.
For customers planning Christmas parties at home, or just sharing with their family, various chocolate brands will be on the agenda. Mars' consumer research found that 24% of customers said they bought boxed chocolates to share with their family, and the conclusion was that "big packs suit their needs best". Its Maltesers Large Bucket is the third bestselling branded gift in the sector in 2006 IRI 16 w/e 30 Dec 06.
However, despite all the good news, Cadbury for one is refreshingly honest about the challenges. It says that "with heightened awareness of healthy eating, shoppers need to be reminded about the positive role of confectionery at Christmas as a permissible treat". Overall penetration is down nearly 1% year-on-year, however spend per individual [AWP] is up from £16.72 to £17.42 over the season. Cadbury says that despite this, most manufacturers "saw value sales decline, driven by deeper trading".
In the sharing area for example, it complains that deals "dropped to two-for-£9 in 2006 versus two for £10 in 2005. It says that 2.2kg tins were "impacted by heavier trading - two for £10 in Tesco and £5.99 in Sainsbury". It concluded that Masterfoods (now Mars) had also lost value sales, and that Nestlé, despite "driving unit [volume] and value sales", had "again been affected by heavier trading as unit sales growth far outweighs value sales growth" (22% versus 14% respectively, as against CTB's 6.4% [volume] versus 5.6% [value]).
??On the savoury side of things, Christmas on the one hand is the most traditional time of year, with consumers reaching for the tried and trusted. However customers are being helped to find products they didn't know they wanted, or given opportunities to find things they want but couldn't previously get. So Polish newcomers to the UK can now, for example, find carp - their equivalent of turkey - on Waitrose fish counters.
Innovations around retail responding to more aspirational Christmas consumers include the setting up of a Goose Fat Information Service. Developed by producers and distributors in response to recent high demand driven by celebrity chefs, this "resource tool" will help both the trade and consumers find information such as recipes and includes a helpline and website.
Bernard Matthews is emphasising convenience, provenance and choice. Its new 1kg premium British joints have been launched to "serve the needs of the growing number of smaller households". The range, available in three popular variants, carries both the Red Tractor and Quality British Turkey logos.
If you have any room after dealing with the main course, Dawn Foods is an example of a firm coming up with innovative ideas to get consumers excited about pudding in Christmas 2007 - its recipe leaflet covers all manner of comforting recipes for consumers who fancy trying their hand at cakes and desserts, and is a clear link in with its ranges. Mr Kipling has launched its Best Ever Mince Pie. Two-thirds of households purchase Christmas cake, and Christmas provides a whopping 85% slice of all the incremental sales in the ambient cake category. An extensive in-store sampling campaign in the major multiples should get the Christmas atmosphere going. The brand is advising retailers to think laterally and stock cake alongside accompaniments like brandy butter.
It may well be next to Anchor, which is using the opportunity to again indulge in a limited-edition Real Dairy Cream - 20% of the product's sales have come in December.n
The spirit of Christmas
Diageo's sales director David Smith said in his company's Christmas launch presentation that the offer "has to be exactly right" in-store at Christmas as "you only get one shot at it". He is correct only up to a point, however, as the season appears to start straight after Hallowe'en. Spirits are high, with half of British households buying spirits at Christmas, but it is essential to give them what they are looking for.
Smith believes the opportunity is there this year to drive penetration among the five million "light buyers" of spirits who, he says, were "put off last year because they had to do a multibuy". He says the big hitter, Baileys, "didn't unlock enough penetration last year".
Has the number of customer complaints about the price of goods increased recently?
