Convenience operators are in the front line as the desire for festive indulgence begins to grip the nation and shoppers get in the mood for the treating season.
This annual spending spree gets under way in the weeks ahead, initially with an increase in demand for confectionery self-treats and sharing snacks, before the focus shifts to gifting and boxed chocolates later in the season. For retailers, the great thing about the period ahead is that more shoppers are in the mood to spend – whatever their financial circumstances – and that mentality fuels the growth of key impulse categories.
Confectionery is at the heart of the festive period, because it is a category that is linked with indulgence, enjoyment and shared social occasions. Snacking is another category that sees increased spend as socialising increases in the months ahead. Impulse plays a big role in both categories, which is why high-impact display and secondary sitings have such a key role to play in terms of stimulating purchase.
New arrivals
While multiple grocers may claim the bulk of confectionery sales (particularly boxed sales) during the final weeks of December, the early part of the season belongs to impulse operators. That is why convenience operators should be ready to start their assault on the festive market through a focus initially on less-expensive, self-eat products.
There is, of course, a glut of new arrivals, including festive-themed confectionery and novel and fun items designed to catch the eye of shoppers as they browse the fixture. The influx of so many seasonal products can make it difficult for retailers to choose the ones that will do the business for them in the months ahead. The worry for retailers is that some of these novelty products may not prove popular and they will be left with stock once January arrives.
The flood of novelty products has already started. Pringles, for example, is launching Prosecco and Pink Peppercorn flavour 200g cans and re-introducing its Pigs in Blankets packs, which it claims are festive must-stocks for independents. There will be many more such products to come in the weeks ahead as suppliers gear up with an ever-growing array of confectionery and snacking items to capitalise on the start of festive spending fever.
Advent calendars
As always, the challenge for convenience retailers with limited selling space is to choose the seasonal products that are right for their shoppers and will justify their shelf space. One big boom of recent years has been Advent calendars and, this time around, there are more options than ever available to impulse outlets.
The festive sales opportunity gets bigger every year and the season seems to start earlier each time around. It is still more than three months to the big day, but already festive buying is starting to have an impact. Some suppliers are encouraging retailers to be ready for the sales surge by putting greater focus on items such as self-treats at the start of October. Others argue that it is best to wait until the Halloween season is over before putting too much emphasis on Christmas confectionery.
Confectionery is synonymous with the gift-giving traditions of Christmas, according to Mondelēz International, which claims to lead the festive chocolate category with a 23% share of the market (amounting to £174m in sales last time around). The company has already unveiled a range of Christmas items.
Driving sales
Susan Nash, trade communications manager at Mondelēz, says: “As one of the highest-penetration categories, seasonal chocolate and gifting present a fantastic opportunity for retailers to drive sales from October through November and December. From Advent calendars to selection boxes, the Christmas category is versatile, highly incremental and brings friends and family together across the nation.
“Gifting goes hand in hand with the festive season. Whether purchasing an Advent calendar, gifting a selection box of favourites or topping up the stockings, shoppers are looking for inspiration and excitement for their friends and family.
“Sales can be optimised by getting the timing right: retailers should be prepared early, starting the countdown in October with self-treats like the Cadbury Dairy Milk Mousse Snowman. They should continue the countdown into November, with Advent calendars and novelty sharing lines. In December, they need to make it clear that the ‘magic of Christmas’ has arrived in their store by stocking selection boxes, Christmas-themed gifts, family sharing lines, top-up gifts and selection boxes, which can replace Advent products on 1 December.”
Expandable category
Lauren George, trade and brand manager at Mars Wrigley Confectionery, says: “Christmas is the most important time of year for chocolate sales. We know three chocolate treats are bought every second during Christmas, but as an impulsive and expandable category, there is always room for treating chocolate to grow. A higher degree of permissibility means treating is highly relevant at Christmas. We understand consumers are more likely to treat themselves, their friends and their family – whether it is shared together or used as a classic stocking-filler.”
Andy Mutton, managing director for Storck UK, says: “Confectionery is a vital category for retailers during the festive season and one that is at the forefront of shoppers’ minds, whether it be for gifting to family and friends or sharing around the dinner table. Christmas is a time when shoppers splash out despite financial circumstances, swapping out of everyday purchases for something different and of higher quality.
Confectionery alone is key at Christmas for both the gifting and entertaining occasions, with Storck brands providing something for everyone. We know shoppers visit independent retailers in the run-up to Christmas as they start to become busier and are looking for convenience and are trading up to bigger and better offerings to share or gift to family and friends.
Premium products
“It’s important for retailers to recognise that shoppers are often looking for those perfect little gifts which are ideal stocking-fillers. They should try having a stocking-filler fixture in their store that contains those kinds of items, as this makes it easy for shoppers at what can be a busy and stressful time.”
Andrew Ovens, marketing manager at Big Bear Confectionery, says: “We know consumers change their shopping habits at Christmas and are far more open to trading up and enjoying a little indulgence, making it the perfect time of year for independents to capitalise and increase basket spend. Novelty and premium products tend to do well at Christmas, as consumers are willing to spend that little bit more on gifting products.
“Chocolate should be a key product focus when looking to build on or expand a Christmas display, and it is vital to provide customers with a wide range of options. Gifting chocolate should be a priority at Christmas and our Just Brazils range is consistently popular. These premium boxes are popular with consumers looking for something special and we recently launched Just Almonds, which we are confident will be a big seller this Christmas. To help retailers maximise their return, we have created a series of gifting items across the Fox’s Glacier brand, including a limited edition centenary tin.”
Sharing snacks
Of course, the pre-Christmas sales opportunity is not all about confectionery and extends to snacks as well. Matt Collins, sales director for convenience, wholesale, discounters and foodservice at KP Snacks, says: “As the nights draw in and the festive season approaches, consumers will be looking to make the most of time with family and friends, and sharing occasions will be on the rise. Research tells us there are currently 1.7 billion sharing occasions to tap into. What’s more, sharing is the largest segment in the lead-up to Christmas. Crisps, snacks, and nuts were among the top performing categories last Christmas.
“As with other seasonal moments, timing is of the essence. Understanding the importance of Christmas sales and activating strongly in-store is imperative for driving incremental spend. Placing crisps, nuts and snacks on promotion has become a great driver of this, with 24% of shoppers purchasing items when they are on a deal, as opposed to just 18% when they are not on offer. This effect is similar when products are available as price-marked packs (PMPs), where 33% believe they are cheaper than the standard price.”
Increased spend
Robert Higginson, crisps category manager at Kellogg’s, which has the Pringles brand in its portfolio, says: “Sharing cans really excel at Christmas, as it’s a time families get together and celebrate. Customers are willing to spend more than usual around the festive period and increase their spending on well-known brands. Last Christmas, Pringles cans were the top two food SKUs in grocery for unit sales. Frequency is the key driver for large sharing in the lead-up to Christmas, with more people buying more often. Christmas is a time for indulgence, tradition and getting together with family. Pringles 200g sharing cans tick all the boxes at Christmas and we expect it to be even bigger this year with the launch of our seasonal flavours and festive packaging.
“Independents should start stocking festive themed lines in mid to late October, and especially after Halloween, as this is when consumers’ minds turn to Christmas and they start stocking up for the big celebration. Independents should have multiple stocking points in the store and should open out space on the fixture to protect availability for last-minute impulse purchases.”
Variety tubs
Mark Walker, sales director at Swizzels, says: ‘‘Christmas is a hugely important calendar event for sugar confectionery, with sharing occasions and gifting being key sales opportunities. Consumers are often on the lookout for variety tubs and tins for Christmas parties and get-togethers, but it also provides a huge opportunity for promoting gifting products.”
Mark Roberts, trade marketing manager at Perfetti Van Melle, says: “In 2017, Christmas sugar confectionary was bigger than Halloween. The festive season is a brilliant opportunity for sugar confectionery. Last year, it delivered the single highest weekly sales in sugar confectionery, worth £15.9m. In fact, in the two weeks leading up to Christmas, there was an 8% growth compared to previous years, with evidence suggesting people are getting even more excited about Christmas and spending more.
Broad audience
“It’s the biggest event in the calendar and continues to appeal to a broad audience. Retailers need to ensure they meet consumers’ desire for occasion and stock the best-selling items off shelves in the lead-up to Christmas. There are two key elements for retailers to capitalise on – sharing and gifting. Family gatherings and group parties are also key, as people trade up to larger pack sizes in chocolate and sugar and, on average, these command a 15% higher price per unit. Retailers need to create dedicated bays in-store with the use of point-of-sale to maximise visibility and tap into the excitement of the season. Displaying novelty items also brings joy to the stress of Christmas shopping. Secondary sitings shouldn’t be overlooked, because retailers can use these throughout November and December to remind shoppers of what’s on offer.”
Russ Goldman, buying director at Rayburn Trading, says: “Christmas is naturally a key time for independent retailers and, when it comes to confectionery, it poses a real opportunity for additional sales. As a minimum, retailers should be stocking lines of Advent calendars, stocking-fillers like chocolate coins and edible tree decorations. Importantly, retailers should carry recognisable brands and a variety of sizes in order to give customers plenty of choice. Retailers should start carrying a small Christmas range from October, increasing the volume into early December.
Final word
“Boxed confectionery is important, as customers want to see these product lines. While impulse retailers won’t be able to compete with supermarkets and discounters on price, they can compete on convenience.”
The final word on Christmas comes from Paul Hargreaves, chief executive of fine food distributor Cotswold Fayre, who believes consumers are looking for products that offer something genuinely different. “When Christmas shopping for a gift or a stocking-filler, customers don’t want to pick up something they could have bought any time in the year, nor do they believe that adding a bit of holly to the packaging makes it a festive gift. Buying a brand that is not available in the supermarkets gives the impression that more care has gone into choosing it.”
