Action Man is in for a lonely Christmas as the squeeze on consumer spending forces many shoppers to cut back on presents. However, luckily for the nation's army of grocery retailers, the one area that people aren't intending to scrimp on is food and drink.

In fact, groceries are the only items which shoppers are planning to spend more on than in previous years, findings from GfK NOP's annual Christmas Spending Survey on food and drink show. The survey of more than 1,000 UK adults found that shoppers were expecting to shell out an average of £182 on Christmas groceries this year, compared with £140 in 2008.

"Britons appear to be switching their priorities, with only food and drink escaping the axe this year," says GfK NOP retail research director Helen Roberts.

"Combined with this is an increase in the number of people planning a 'low-key' Christmas and we know that people are eating out less. So put these together and it would appear that more people are planning 'at home' Christmas celebrations and entertaining family and friends rather than going out. Prospects for Christmas look promising for grocery retailers large and small."


According to HIM marketing manager Georgina Wild, convenience remains in a strong position: "By staying 'convenient' and having the right products available and visible, it will continue to do well. More people will be doing smaller top-up shopping, especially when entertaining at home."

So what will these savvy shoppers be buying? Well, for stores which open on Christmas Day, emergency buys such as foil, stuffing mix, cranberry sauce, tomato juice and batteries always sell. The ambient category as a whole usually does particularly well in the run up to Christmas and Premier is capitalising on this with several launches and revamps.According to the company, 2008 was a turnaround year for pickles with one in every two UK households buying from the pickle fixture over Christmas. As such, it is bringing back Branston Red Onion & Cranberry Pickle.

No turkey dinner is complete without gravy and Premier has added Bisto 300g Turkey Granules and Ready to Use Turkey 200g pouch to its range. The Oxo brand has had a £1.8m relaunch including new pack designs backed up by the £2.5m Oxo Factor campaign. Oxo has been inviting families to make their own ad and the five best are airing now, with the winning choice to be shown during the final of X Factor next month.

Christmas nibbles

Christmas is a time for sharing and share-size snacks saw a 7% increase in volume sales in the run up to Christmas last year (UB UK/Nielsen Total Market Seasonal Performance, 16 weeks ending January 3, 2009).

Says Nick Stuart, commercial manager at United Biscuits (UB): "Biscuits and snacks are two of the strongest performers at Christmas. To ensure this is capitalised on, retailers must stock a range of big brands to attract shoppers, and new products to add interest and drive incremental sales."

UB's snack division KP is hoping to cash in with Phileas Fogg sharing bags. There are four new variants for Christmas: sea salt & Indonesian black pepper; sea salt & balsamic vinegar; Mexican sweet chilli crisps; and sour cream & Mexican chilli tortillas.

For customers who go nuts for nuts at this time of year, KP has two new variants in a sharing size drum: salt & vinegar and spicy chilli.

Walkers is also getting in on the act with 99p pricemarked share-size packs of top brands. "Offering pricemarked packs is the perfect way to capitalise on the biggest in-home social occasion of the year," says Walkers vice-president of impulse sales, Kirk Tanner.

According to Nielsen, seasonal biscuits did well last year, growing by 5.8% in the convenience channel over a total market decline of -0.3%. Fox's brand sector director Rachel Moffatt believes this year should bode particularly well for c-stores: "With the recession lingering on, shoppers are making more frequent shopping trips with a smaller basket size to economise and cut wastage an opportunity which c-stores can continue to capitalise on."

She says that retailers should be stocking products that span a range of price points to encourage the consumer to trade up, which they will happily do at Christmas for family get-togethers and as gifts.

Fox's has two seasonal assortment launches this Christmas: Fox's Fabulously Special Selection, an 800g festive red tin; and Fox's Wonders 400g tin.

Sue Garfitt, Burton's Foods head of insights, believes that whether or not the recession has actually affected consumers' personal economic circumstances, it is still affecting their behaviour: "There's a lot of media activity out there and shoppers respond to messages about value." 

Maryland bright

This year Burton's is bringing back Maryland to its seasonal range with a Merryland 675g cookies tub and white choc chip mini cookies carton. Its Cadbury range has been extended to include Cadbury Cookie Selection which joins the Cadbury selection carton, Cadbury tub and White Chocolate Fingers. The Cadbury heritage barrels also have a new look.

New products from McVitie's include Disney McVitie's Cookies & Creams, which come in a special Mickey Mouse collectors tin, and the Jaffa Present which offers same number of biscuits as the Jaffa Yard but which is presented in a more space-efficient package. For more mature customers, McVitie's has repackaged its 600g gifting tin to give it a classic look.

The seasonal cake category showed a 5% increase in volume sales compared with the previous year (Total Market Seasonal Performance, 16 weeks ending January 3, 2009). New cakes from McVitie's include Penguin Yule Logs, a festive edition of Penguin Mini-Rolls. Christmas also marks the return of the special-edition Jamaica ginger & rum cake, Irish cream bars and mint digestive slices.

From Premier comes Mr Kipling Rum & Raisin Slices and Lyons Family Mince Pie, and the return of Mr Kipling Festive Fancies.

Home baking

One area that has been flourishing throughout the year and which always does particularly well at Christmas is home baking. In fact, according to Premier 30% of the total value of home baking is down to the last 12 weeks of the year. To make the most of this Premier has relaunched its McDougalls home baking range with new packaging and three new variants: Supreme Sponge Flour, OO Grade Plain and Whole Gold, an all round flour which contains the goodness of wholemeal flour. There are also three new basic mix products including two McDougalls Luxury and Savoury Crumbles.

Clearly, big name brand classics will remain high on consumers' shopping lists, but Claire Nuttal, client director at brand consultancy Dragon Rouge, says that shoppers will also be keen to buy more premium and speciality food to add a bit of razzle dazzle to celebrations.

"Locally produced, regional varieties or home-made foods will be seen as quality extras that save time while supporting local communities," she says.

Speciality jams, preserves, pickles, mustards and cheeses are all expected to do well this year, as shoppers dress their tables to impress.

And food gifts are also predicted to be more popular than ever this year as shoppers go for more practical pressies and steer clear of frivolous novelties.

"Quality extras which would make a meal better, or end a meal with a delicious treat, will do well," predicts Nuttal, "those things that people would not want to pay extra for themselves, but which make a real difference to a get-together."

Thorntons commercial customer marketing manager Eve Roberts agrees: "Last year we saw that people traded up and bought Thorntons' products for loved ones and close family, which significantly contributed to our recent growth," she says.

So the message is, play it right and Christmas 2009 could turn out to be a right cracker for c-stores.