In terms of retail sales, last Christmas didn’t exactly set the high street alight. According to the British Retail Consortium (BRC), spend was down by 1% over December, and if the past 11 months are anything to go by it’s unlikely the forthcoming festive period will set new spending records either. “This Christmas will be slightly more subdued as higher utility bills, petrol prices and credit card bills impact on shoppers’ budgets,” says Bryan Roberts, global retail research manager at M+M Planet Retail. “There will still be the usual seasonal splurge, although it might be more muted than retailers have got used to.”
British Retail Consortium spokesperson Dee Crooks agrees there will be less cash - both in shoppers’ purses and retailers’ bank accounts. “With the current economic climate Christmas is going to be a very important time for retailers, but there’s a downturn in consumer confidence and there are other significant issues for the retail sector such as increased business rates and rents, and the increase in the minimum wage,” she says.
Fortunately, there are still plenty of reasons why the convenience retailer should pull out all the stops and make this Christmas one that customers will remember. Christmas can account for up to 60% of a larger store’s turnover but, for the convenience operator, using the period to gain new customers is
as key as generating extra cash, says HIM chief executive officer Mike Greene.
“A lot of customers who aren’t normally convenience store shoppers will shop at one over the period out of necessity, so it’s a great opportunity to wow them, to be a Good Samaritan when they can’t get to a supermarket, and use that as a foundation to build a regular loyal customer,” Greene says.
Consumer reluctance to dig deep is, predictably, hotting up the competition on the high street. Says Roberts: “The gloves are already off from the majors with regards to Christmas pricing. Asda’s early campaign on beers and spirits is a sign of things to come. With the big retailers using special offers to create prices lower than many independents can see at wholesale, the independent sector will continue to be pressurised on price.” But Roberts believes that by doing what they do best and by capitalising on their position, convenience retailers need not suffer.
“With proximity and a more personal service on their side I don’t think it will be all doom and gloom for the independent channel or smaller chains. By trading on their localness and proximity to shoppers, and by offering flexible opening hours, perhaps with a few special offers thrown in, c-store operators should continue to ensure they remain a key sales channel for consumers in the run up to the festive period.”
Greene urges retailers not to be over-cautious when stocking up. “I’d rather throw away 20 loaves of bread after Christmas in the knowledge I had plenty for everyone who came in. It’s an investment because a customer over the festive period can be a customer kept and, let’s face it, if you are throwing away 20 loaves how much are you really losing, £5?”
In fact, consumers’ last-minute Christmas shopping habits could also favour conveniences stores.
“A day or two before Christmas shoppers often think they’d better get something in in case someone visits, which can result in panic buying,” says Greene. The last thing time-strapped consumers want to do is spend more time than necessary negotiating a busy supermarket or queuing, making the well-prepared c-store the ideal destination for that last-minute bottle of wine, gift or grocery essential.
Most importantly, c-store retailers must take advantage of a growing consumer desire to patronise convenience stores. “More people want to support their local stores, so if they don’t let consumers down and have what they want, more people will use their convenience store. It’ll be a great year for those retailers who make it great for their customers - those who decorate the store, make it festive and get in new and better products,” says Greene.
“More important than the sales, they will get a lot of one-off and new customers, and it’s a chance to win them over and get that local loyalty back,” he says.
What may seem like an optional extra at any other time of the year can become an emergency essential on Christmas Eve. Cranberry sauce, for example, is now a must-have Christmas condiment as figures supplied by F Duerr & Sons, distributor of the Ocean Spray cranberry sauce brand, show.
On average, grocers stocked eight cranberry sauce products out of 32 condiments in December 2004 and cranberry contributed 44.8% of total condiment sales. “From autumn 2004 onwards there was a significant switch from own label to Ocean Spray, with the greatest share for Ocean Spray in December, at 60.8%,” says sales and marketing director Richard Duerr.
When it comes to food, regardless of the category, the big brands are the order of the big day. Not only are they names that are known and trusted by consumers, they’re also likely to benefit from increased demand as a result of consumer advertising and new product development. Manor Bakeries, for example, is targeting the festive period with new product development which will help convenience retailers get a larger slice of the Christmas cake market, says Manor Bakeries trade marketing manager Sabina Maharjan.
“Christmas is a perfect time for the convenience trade to tap into the growing £100m ambient cake market. Manor Bakeries has identified opportunities to drive sales by offering alternatives to mince pies and ideas to encourage seasonal sharing. There is a big gap in the market to appeal to the 45% of consumers who do not buy into mince pies,” she says.
Christmas is one of the most important periods for the crisps and snacks market with nearly one million more households buying during the festive period, says Walkers Crisps. In addition to its regular portfolio, the company has produced new Christmas-inspired products including Walkers’ Christmas turkey & Paxo flavoured crisps, crispy coated peanuts, Sensations pretzels and limited-edition Sensations in pan-fried sausage & sage flavour in 150g sharing bags, and new roast pork & creamy mustard sauce flavour in 40g standard and 150g sharing bags.
Golden Wonder is running promotions in the lead up to Christmas with the focus on Wheat Crunchies and Nik Naks. Deals include multibuys and bogofs through cash and carries and wholesale channels.
One of the big drivers behind savoury snacks sales is the Big Night In concept, and another beneficiary of this is the soft drinks category. According to Britvic Soft Drinks, 39% of adults already have a Big Night In at least once a fortnight, but this represents even bigger opportunities over Christmas. The company’s Right Choice research has identified key participants as mixed groups of three or four 18- to 34-year-olds and suggests retailers stock up on 2ltr bottles and multipacks of the big brands. To assist retailers, Britvic has a number of display solutions for its family packs of Pepsi Max, Tango Clear, Robinsons and 7UP, such as its 2ltr bottle stand.
Coca-Cola hopes to give its brand a contemporary feel with a range of festive on-pack graphics on both the main brand and diet variants, in 330ml six-can packs, 12- and 24-can packs as well as the all-important 2ltr bottles. According to the company, colas are the biggest sector within soft drinks over Christmas, with 23.1% of the value share of soft drinks by sector. It says household penetration increased by 4% and average weight of purchase by 2% last Christmas.
Last year overall soft drinks sales grew by 6% over Christmas and retailers need to be prepared for more of the same, says Britvic Soft Drinks. “The usual top performers like Robinsons, Pepsi and Coca-Cola remain at the top, but the rise of dairy, adult soft drinks and smoothies during the Christmas period reflects a year-long trend in the market,” says Britvic category director Andrew Marsden.
Energy drink Red Bull and water brand Volvic experienced the biggest growth at 21% and 29% respectively, but pure juice and water gained further ground, recording 6% and 15% growth.
This year Marsden predicts the trend towards healthier options will go further. “Drinks like J2O will be top of mind for consumers looking for a premium soft drink this festive season. Family favourites such as Robinsons will continue to do well, especially with the no-added sugar offering making the product more appealing to parents buying for their children.”
Giles Brook, sales controller at smoothies company Innocent Drinks, agrees retailers need to remember that not all consumers will hit the hard stuff. “Must-stocks include non-alcoholic drinks for the drivers in the party season; 1ltr take-home cartons if you are having a party; and anything packed with healthy vitamins to help ward off those colds during the party season,” he says.
Having a good stock of healthier options can also stand you in good stead when over-indulged shoppers seek products to assuage their post-Christmas guilt trips.
As the trends in soft drinks illustrate, even over the traditional blow-out Christmas period more and more consumers are attempting to eat healthier so it’s worth remembering to stock vegetarian and vegan options for non-meat eaters and the increasing number of meat reducers. Redwood has a wide selection of veggie options including Celebration Roast, a turkey-style, ready sliced roast complete with Vegi-Deli gourmet sausages wrapped in Redwood’s Streaky-Style vegetarian rashers and turkey flavour gravy. Other festive foods for vegetarians and vegans include Redwood’s meat-free Lincolnshire-style sausages, which come ready to eat and can be eaten hot or cold, and dairy-free cheese alternative Cheezly with Cranberries.
For those with a sweeter tooth, Anthony Alan Foods produces a wide range of low-fat cakes under the Weight Watchers brand including Christmas cake slices, mini yule logs, mince pies and Christmas puddings. “Christmas may be a time of indulgence but many consumers want healthier options,” says marketing director Sarah Walker. “Lower fat cakes are big business and the Weight Watchers brand dominates the market. Offering healthier options of Christmas treats may seem like a paradox but it is what consumers are looking for.”
Some consumers will be determined to over-indulge, so don’t neglect the healthcare fixture. According to Nick Winter, customer activation controller at GlaxoSmithKline Consumer Healthcare, sales of Beechams, Zovirax, Zantac and Andrews last year all peaked in December, while NiQuitin CQ had its highest sales in January. “Must-stocks include something for pain relief, such as Panadol Extra; indigestion/ heartburn, such as Zantac 75 Relief; and cough, cold and sore throat products such as Beechams All in One. Smoking cessation products such as NiQuitin CQ are worth stocking as there is always increased interest post-Christmas as New Year Resolutions kick in,” he says.
Jenks Sales Brokers commercial director Ross Beattie says products such as Benylin, Sudafed, Calpol and Calprofen see an increase both pre- and post-Christmas due to the high incidences of cough, colds, fevers and congestion. “Benylin adult chesty & tickly, Benylin child chesty, Calpol infant, Calpol six-plus and Sudafed dual relief are must-stock items for your medicines fixture this winter as these products will satisfy your consumers’ needs when looking
for cough, decongestant or kids’ pain remedies.”
And when it comes to the hangover time, it’s worth remembering Alka Seltzer sales can be four times higher over the Christmas and New Year period.
While consumers may be able to let their batteries drain a little over Christmas, retailers will do well to ensure they’ve a variety of standard and rechargeable cells. According to Duracell, a third of all batteries are sold between October and January, so it’s important to stock up and let customers know you’ve got an extensive range. Says Duracell UK senior business manager Flavio Palumbo: “We know that visibility drives sales of our brand. It is crucial for retailers to display batteries clearly in high-traffic locations around the store, encouraging impulse purchases and potentially increasing profits.”
Retailers can capitalise on the successes of the battery category by highlighting the main fixture at the front of the store and ensuring that batteries are placed in the toy, music, imaging and safety aisles if possible, he continues.
Panasonic Batteries marketing manager Tim Clark says batteries are an attractive stock item as they don’t take up much space and the whole range can be displayed on a stand. “We know during the weeks leading up to Christmas that sales of batteries triple, driven by the number of gifts given at this time of year requiring batteries. We encourage all retailers to make the most of this opportunity.”
To capitalise on the impulse nature of the purchase, Panasonic is offering a four plus four-free pack, as well as 50% extra-free 12-pack on AA products, as well as a number of wholesaler promotions.
Of course, convenience stores can never compete with the enormous ranges offered by the big supermarkets but by ensuring all the main categories are covered, Greene at HIM believes local stores will have a very merry Christmas. He confirms: “I think Christmas is going to be a great opportunity for convenience stores but they mustn’t forget to have fun - everybody wants to see a smiling face, so get staff to dress up and get into the festive spirit.”
This will be Parves Bahthi’s third Christmas at his Post Office in Anstey in Leicester, and this year he’s really pulling out all the stops. He’s putting the emphasis on convenience grocery with new freezers and an
off licence fixture that takes up 20% of the store.
“This is the first year that I’ve really known what consumers want - things such as bargain beers - so we’ll be stacking them up and offering big promotions,” says Parves. “We have a Big Night In area - next to the DVDs we have popcorn, big bars of chocolate and marshmallows, and we’re working on getting a portable Häagen-Dazs freezer so we’ll have all those snacking products for shoppers to grab and go. We’re also getting big Christmas deliveries - lots of 2ltr bottles of soft drinks and 24- and 12-can packs.”
Being a Post Office, Parves has a large stationery section “so we’ve complemented it with Christmas accessories such as greetings cards and wrapping paper and focused on the £5 gifting market. We’ve got a lot of candles this year - they seem to do well - and we’ve sourced gifts for pets such as boxed blankets. The multiples won’t have them.”
In addition to dedicating a full three metres to a Christmas area front of store, Parves has also dual-sited some festive products. “We’ve got a proper section especially for Christmas so everyone knows where it is, but if they want cards they can go to the card section and if they want gifts they’re all around the shop for impulse.”
The Post Office is Parves’ first foray into retail and so he’s been on something of a Christmas learning curve. “The first year we brought in the Christmas products in December, last year November, and this year we hit October,” he says.
Parves praises Masterfoods, which is helping maximise his confectionery ranging and merchandising, and the FWD for helping with his off licence ranging. “It planned my whole off licence area so now it’ll really have that wow factor. I’m also working with Bestway to get good promotions. But most of my advice has come from local retail friends and reading
C-Store. Basically, the message is lots of pop, drinks and snacks, and go for the big brands. Deal with volume and stack them high, saying ‘There they are, go for it’.”
Coughs, Colds and Hangovers
Christmas won’t be so merry for those with a streaming cold, thumping hangover or excruciating heartburn. With many chemists shut over the festive period
c-stores can be a lifeline for many suffering customers.
Bayer is running a six-for-five campaign in the wholesale channel on Alka Seltzer original and XS 1x6, and an Alka dropfeed unit is also available. Rennie is being treated to national TV support until the end of the year as part of a £5m 2005 campaign along with a variety of below-the-line promotions in the run up to Christmas.
A high-profile £8m TV campaign will run behind Benylin and Sudafed. Benylin adult & child chesty coughs have recently been launched in a sachet format, and Benylin 125ml is now available in an adult & child tickly format.
Reckitt Benckiser has launched Gaviscon Cool Tablets in a handy pack, supported by a £5m multimedia, TV and outdoor campaign. The new advertising will run throughout the remainder of 2005 and into 2006. Gaviscon Cool will be available in packs of 12 tablets, rrp £1.99, and 16-tablets, rrp £2.65, and will be shipped in shelf-ready packaging for maximum
Lemsip is being supported by a new advertising campaign running in 30- and 10-second executions for the Lemsip Max cold/flu products along with a 20-second execution for the Lemsip sinus range throughout the cold/flu season. An outdoor campaign will support the TV ads.
A £5.4m support package, which is expected to include TV, press and PR, will highlight Beechams all in one and Beechams flu plus. It is scheduled to run into the new year.
GlaxoSmithKline Consumer Healthcare is supporting its Zovirax cold sore cream with a national TV campaign timed to drive sales during the key winter trading period. Zovirax cold sore cream is available at £5.99 rrp for 2g tube and £6.19 for 2g pump.
On the Market
The CFH Group has launched a premium range of convenient frozen traditional roast dinner platters under the Cook’s Desire brand. The range includes: premium beef dinner with Yorkshire pudding; chicken dinner with sage & onion stuffing; premium lamb dinner; premium pork dinner with apple sauce; and premium turkey dinner with pork sausage. Each meal includes special gravy, roast potatoes and a gourmet vegetable selection and can be cooked in the oven in 30 minutes or microwaved in 12 minutes. The range is available from Londis and Palmer & Harvey, with rrps between £1.50 and £1.78.
Ocean Spray has introduced a premium chilled cranberry sauce packed in 300g pots with a rrp of £1.99. The brand is being supported by a PR campaign and a series of reader offers and competitions in the national press, offering the chance to “Win a Chef for Christmas Day” and limited-edition Dartington Crystal cranberry sauce pots commemorating the brand’s 75th anniversary.
Britvic soft drinks has launched a festive limited edition, Pepsi Max Punch. The drink is a combination of classic Pepsi Max with a hint of ginger and cinnamon. The packs feature a distinctive orange cap and festive on-pack graphics and are available in 2ltr and 6x330ml packs.
Manor Bakeries has launched new products especially for Christmas under the Mr Kipling brand. White chocolate & cranberry muffins are available in a shelf-ready outer, rrp 89p per 112g muffin; Slice Selection, rrp £2.35 for a 413g pack; cranberry & orange whole cake, rrp £2.99 for 410g cake; and a Cadbury chocolate Christmas cake, rrp £7.49 per 517g cake. The company has also introduced a number of range improvements including new festive packaging across Mr Kipling and Cadbury lines.
Bic has a number of gift ideas in the run up to Christmas including a Harry Potter themed gift set in a metal box containing a Harry Potter fountain pen and two badges; a Colour by Numbers pack, rrp £3.49; and a Kids Colour Box, rrp £4.99, a plastic box containing colouring book, stickers, washable felt pens and colouring pencils. The brand also offers a Select range, priced between £3 and £7.