Sweet talk
Confectionery, and in particular chocolate, is a big seller at Christmas. Nisa-Today’s Central Distribution Service trading business manager David Stokes says Christmas planning for this category starts way back in the first week of January. “Retailers review their business over the previous two months and make notes on all the winners and losers, then put down their thoughts for the coming year. This covers not only the ranges sold, but the space given to the products and any consumer feedback they’ve received. “Confectionery sales are buoyant all year round, but when Christmas products start to become available retailers need to get in early. We recommend they start displaying Christmas confectionery from the first week of October, but every retailer has to make their own decision on what extra floor space they can give.” Stokes reckons confectionery gift boxes are bought early by the price-conscious consumer who is spreading their spending across a few weeks. “Tins of sweets often get bought early but sometimes they get eaten early too, so a second purchase has to be made before Christmas. Retailers can only get that sale if they’ve displayed the product.” When it comes to finding space for all these lines, Stokes says retailers need to check their whole shop to ensure old displays are cleared. “Barbecue items and outdoor activity products can sometimes get overlooked. Retailers also need to check that all the manufacturers’ stands they have are earning their space because festive products are a big sales opportunity and they don’t want to miss out.”
Snack happy
According to TNS Worldpanel figures, the average shopper spends nearly £100 on Christmas snacking products. United Biscuits UK commercial manager Nick Stuart says it’s essential, therefore, for retailers to plan ahead to ensure they capture the Christmas sales early and enjoy repeat purchases. “We suggest creating a Christmas display in mid-October and then, as Christmas draws closer, increasing space allocation.” And he says retailers are missing a trick if they don’t create a dedicated display area. “Customers may well see a range of seasonal biscuits that they will buy, but it’s possible they could get distracted on their way to finding the crisps, nuts or cakes that are part of the rest of their Christmas shop and seek these products elsewhere.” And it seems the ‘eating the Christmas treats before Christmas’ scenario that Nisa’s Stokes alluded to with tins of sweets is repeated with snacks. Stuart explains: “It’s important for retailers to run price promotions, as the earlier they stock the product, the more likely their customers are to see, purchase and, crucially, consume it before the festive period. This produces repeat sales opportunities. Early-bird promotions should ideally start in October, to capture the people who like to do their Christmas shopping early. Different price promotions should run in November – presenting customers with further reasons to carry out multiple shopping trips and, in turn, boost retailers’ profits.”
The right offer
Of course, the likes of Tesco, Sainsbury’s and Asda will all be promoting like crazy in the run up to Christmas, but what about c-stores? Do they need to as well? James Hall’s McAulay says that value messages are just as critical at this time of year as at other times. However, HIM’s Greene says: “Yes, run promotions but don’t feel you need to give the products away.” It’s a similar message from suppliers. Anchor Foods spokeswoman Hannah Acres says: “We don’t believe it’s worthwhile doing money off in December as people will buy our aerosol cream anyway, plus they’re willing to spend a bit more at this time of year so price promotions are really just giving money away.” Britvic sales director Andrew Richards says it’s important for c-stores to strike a balance. “They need to be competitive with large grocery stores, but not disregard the opportunity that distress shopping provides. Most consumers will go to a large grocery store for the ‘big Christmas shop’, utilising convenience stores for top-up shops and last-minute distress or emergency shops – the essential and last-minute nature of these visits allows convenience stores the opportunity to increase profit margins.”
back to basics
Wiseman Dairies sales and marketing director Sandy Wilkie describes the period around Christmas as ‘volatile’ in terms of demand for milk. “The large multiple retailers experience a significant spike in demand the week before Christmas, usually followed by a trough and then another spike around New Year. The convenience sector should have opportunities during the trough around Christmas to satisfy demand for milk and cream in particular. More predictable, however, is the spike in demand for cream which can be as large as five to seven times that during an average week through the year.” Wilkie says that consumers will not necessarily be trading up at Christmas but they may alter their buying habits and consider products such as extended shelf-life milk. Not surprisingly, he says the most critical factor over the Christmas period is availability. “A customer who comes looking for milk or cream will almost certainly buy it if it’s available. This makes Christmas a period of significant opportunity for retailers to capitalise on what will definitely be a driver of footfall over this period, but planning the ordering is key. “Consideration could also be given to allowing more space for milk and cream in the chiller cabinet to ensure a full range is on display at all times over the Christmas period.” Anchor recommends c-stores start displaying their brandy butter and cream in early to mid-November – in fact, as soon as the complementary products like mince pies and Christmas puddings become available. Like milk, bread is something no household likes to run out of at any time of year, but particularly not at Christmas when many people will want turkey sandwiches for tea. “A shopping trip is often prompted by running out of bread and with an increase in the number of eating occasions during the Christmas period, it’s a particularly important category for convenience retailers to focus on and get right,” says Warburtons category director Sarah Miskell. Britvic’s Richards believes Christmas provides retailers with a fantastic opportunity to capitalise on soft drinks sales, particularly in terms of products offering the largest profit margins. These include premium drinks, such as J2O, which according to AC Nielsen, enjoyed a 10% increase in value sales leading up to Christmas 2007. “Our research shows that while consumers are buying more soft drinks over Christmas, they are also willing to spend more on them. People tend to ‘trade up’ at Christmas, buying what they perceive as indulgent and premium quality drinks to satisfy their individual needs or even to impress their guests. In fact, research shows that 70% of consumers feel that it’s worth spending a little extra for a quality product around Christmas time.”
Raj Krishnan, retail controller for Landmark’s Hot House programme, says that whether it’s meeting the demands of shoppers on their way to a party by offering chilled wine or beer, or keeping stocked up with snacks to satisfy customers’ needs for last-minute entertaining, there are many profit opportunities to be had at Christmas. His festive tips include: ● take advantage of promotional packs ● encourage trading up by stocking premium brands ● ensure you have a large range of chilled drinks including beer and wine ● remind customers that you are selling seasonal items by promoting the fact in your shop window ● be prepared – if shoppers see you are well stocked with their favourite products early on they will know they can rely on you in the busy run up to Christmas Day ● stock up on Christmas cards, decorations, crackers and batteries ● stock gift bags so customers can turn a box of chocolates or bottle of wine into a last-minute gift.
David Patient, Nearbuys, Canvey Island, Essex “We have a lot of Christmas lights outside the store so we make an event of switching them on. Last year we had 250 people turn up. We had a school choir singing carols – it was great. It had a big impact and was a very effective marketing tool as we got a lot of coverage in the local papers. This year we’re hoping to get the Salvation Army to turn up. “With the credit crunch you’ve got to be more proactive. We’re going to have to work harder this year. My advice is to think carefully about what your customers want. We always look for as many new things as we can, to get shoppers’ attention.”
David Smith, Smiths Corner Store, Louth, Lincolnshire “Christmas is now an extra rather than the big event it used to be for us. We start planning at the end of May, looking at the confectionery deals and the stands available. We usually have two one-metre seasonal stands. We have a little teaser display of new products to start with, to get customers interested. “Our Christmas range includes the usual confectionery, biscuits and snacks, but we also have frozen party items and we increase our stock of certain spirits. Last year we did well with novelty gifts. People were using them as stocking fillers. “We try not to over- promote pricewise as it takes away the bonus element you can earn, but you have to be seen to be competitive.”
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