It’s high time to start planning your Christmas confectionery offer in order to maximise sales. We get some advice on how to tackle this key season

From opening a tin of sweets on the big day, to sharing a box of posh chocolates with friends after dinner, for many people confectionery is a central part of celebrating Christmas. And with a market valued at £538m in 2009 and showing growth of 2.7% year on year according to IRI, Christmas confectionery could be the key to ensuring seasonal sales bring good cheer for convenience retailers.

Top five from...
1 Quality Street My Favourites (Purple One, Green Triangle, Caramel Swirl) 

2 Kit Kat Claus 

3 Giant Tubes (Smarties, Rowntrees Fruit Pastilles, Rowntrees Pick n Mix, Milkybar) 

4 After Eight Mints 300g 

5 Quality Street Carton 400g 

Source: Nestlé
"Christmas confectionery really gives consumers an opportunity to connect with the magic of the season," explains Kate Whitehead, brand manager in charge of the traditional Christmas category at Cadbury.

"Christmas confectionery has to be different from the confectionery that consumers buy all year round. It has to offer 'newness' and a connection to the magic of the season."

As Kraft UK and Ireland director of convenience Steve Mounty points out, last year saw confectionery sales experience real growth, despite Christmas 2009 marking the peak of the recession.

"The downturn was still in full swing at the end of last year with unemployment at 2.5 million and inflation at 2.9%," he says.

However, Mounty explains that despite a rocky ride for consumers, shoppers still decided to treat themselves, their friends and families to something sweet.

He believes that much of Christmas confectionery's success was driven by the convenience sector. "More people than ever turned to their local independent retailers to pick up last-minute chocolate treats and stocking fillers, which was great news for the convenience trade," he says.

Nestlé UK trade communications manager Graham Walker believes that by playing to their strengths, c-stores can really cash in on confectionery as Christmas approaches. "Convenience retailers can win if they focus on a core range of products that meet their shopper missions of impulse and distress. It's a great opportunity for retailers to adjust their range and maximise sales," he says.

Retailer’s view
"Last Christmas was good for us. At this time of year people tend to splurge on confectionery, however badly the economy is doing. "We tend to do well with high-quality premium lines such as Green & Blacks and Thornton's people like to trade up to something special at Christmas. "We always have Christmas stock on the shelves by October, although not many people buy it that early you're really just making a statement because everyone else is stocking it. The key to doing well at Christmas is all about holding your nerve. People will wait until the last minute to make their purchases, and that's usually when the multiples are out of stock." 

Mike Howe, Londis Clyst St Mary, Devon
When coming up with its confectionery range for Christmas 2010, Nestlé took a long, hard look at consumer behaviour over the period last year. According to Walker, in the 12 weeks leading up to Christmas 2009 there were a total of 86 million shopping trips. In December more than 67% of these visits were 'small basket shops'. He maintains these are exactly the kind of top-up trips which benefit c-stores the most.

Month by month

Walker advises rolling out different products across different months to meet the changing needs of the seasonal shopper. He recommends putting the onus on seasonal impulse products in October, then in November bolstering boxed chocolate ranges to meet the needs of shoppers looking for a gift to share when visiting friends.

For December, when 40% of total Christmas sales take place, he recommends stocking up on confectionery staples which consumers can buy to suit different distress gifting occasions.

Figures show that consumers will buy early if they're given the right opportunity. According to Kantar WorldPanel, 37% of consumers seeking out Christmas confectionery make purchases early in the season, and it's these shoppers that account for 53% of the total Christmas spend.

Walker believes that with the right range c-stores shouldn't be afraid of competition from the multiples at Christmas. As part of its market research, Nestlé talked to retailers who had performed well over the period in 2009. It found that successful stores simply honed in on listening to their customers and stocking what they wanted.

Hancocks purchasing director Jonathan Summerley also believes that although the multiples may be gearing up with offers to attract shoppers this Christmas, convenience stores can still more than hold their own.

"There is no doubt that the Christmas season remains the absolute peak of the year for all businesses that sell confectionery," he says. "While competition will always come from the supermarkets, it surely demonstrates the sheer size of the opportunity if you look at it constructively."

Summerley says that independent retailers have some serious advantages over the multiples during the festive season. "Because they have total flexibility they can quickly change or develop a display to react to sales and buy more stock in an instant. Customers buy on impulse, so if they see a great deal displayed well they are likely to buy it there and then.

Consumer’s view
"Christmas is always social for me, so I often end up buying chocolates (plus a couple of bottles of wine) to take round to friends on the way home from work. It's the one time when I'm not really that bothered about saving cash. I just want to buy what I need (normally some kind of premium chocolates, or Matchmakers if I'm pushed) and head out." 

Matt Taylor, teacher, Brighton, East Sussex
 "Think about what you can do better than the supermarkets in the run up to Christmas and it will pay off," he says.

 He advises stocking plenty of confectionery products that won't appear in the supermarkets and be margin savvy. "Be enthusiastic about the opportunity and it will rub off on your customers," he says.

Gifts for all

These days it's not just your spouse or the kids who expect a present come December. Sometimes it seems that everyone from the paper boy to the children's teacher needs to receive a Christmas gift.

This generous impulse has seen gifting soar 25% year on year, according to Nielsen and it's precisely these opportunities that can see retailers benefit from working out a great Christmas gifting list of their own.

It's worth remembering that when it comes to gifting, bigger isn't always better, which is great news when shelf space is tight.

"We've seen gifting trends change through the Eighties and Nineties up to the present day," says Cadbury's Whitehead.

"Where once people wanted to show off with the most expensive present, today people want to buy something that shows how well they know and understand the needs of the recipient."

Last year Mars generated £74.5m-worth of Christmas confectionery sales, and for 2009 wants to further improve its performance with a blend of new products and old favourites with the gifting market in mind.

Consumer’s view
"I think Christmas is all about the classic confectionery brands the kind of sweets and chocolates that we all grew up with when we were kids. Buying confectionery as a present can be more problematic now, though. A few years ago I'd look to spoil my nieces and nephews, but these days parents are much more health aware and are often trying to limit children's sweet intake, even at Christmas." 

Juliet Price, bank worker, London
Its big new product is the limited-edition Red & Greens M&Ms box. Mars say that the M&Ms brand is growing at 14.5% year on year and is counting on the limited amount available to create extra excitement. The launch will be supported by a new TV ad which is part of a £4m spend on M&Ms in the last quarter of the year.

The launch will bolster Mars' existing gifting and sharing favourites such as Celebrations and Maltesers. The packs for each will be revamped for Christmas and supported by a £1.3m advertising campaign.

The key to maximising boxed chocolate sales, says Ferrero UK sales director Jason Sutherland, is offering a range that meets all of the customer's gifting needs. "Whether it be a small stocking filler for a loved one, or a token gift for the office Secret Santa, the Ferrero boxed chocolate range has a format and taste to suit every occasion."

For 2010 the brand is seeking to consolidate its position with a £4m marketing campaign based around a 'Food of the Gods' tagline.

The publicity push will include giant branded Christmas trees at selected UK shopping centres, extensive sampling activity, a new website and a viral marketing campaign.

As Ferrero Rocher's success proves, one of the fastest-growing categories within gifting is the premium gifting sector. "During Christmas 2009 premium gifting grew by an impressive 17% and is now worth £99m, which demonstrates that consumers are keen to trade up during the festive season," says Green & Black's senior brand manager Gemma Barton.

Consumer’s view
"Everyone loves chocolates at Christmas, don't they? All year we have to listen to people go on about cutting down on fat, but it's the one time of year you can treat yourself without feeling guilty. I do think that the recession is making people go back to the brands they enjoyed as children - just look at the way Wispa and Milky Bar have been rebranded. I think that'll be a real trend this year." Brian Chapman, shopworker, Lewes, East Sussex
Green & Blacks is expanding its gifting range in 2010 with two new products which build on its popular Miniatures range: a Milk & White Miniatures Collection; and 24 Miniature Bar Collection.

Last year saw Cadbury weigh into this lucrative market with Koko by Cadbury, which delivered £1m in value sales, making it the number one premium giving npd that year.

Cadbury is building on this with the launch of Koko by Cadbury assorted truffles, which include roasted almond, milk chocolate and hazelnut praline flavours.

Of course, sometimes clever marketing means that selected brands transcend humble beginnings to become synonymous with the Christmas season. Unsurprisingly, it's these iconic brands, such as Quality Street, Milk Tray and Roses, which tend to dominate gifting as the year draws to a close. And while some confectionery manufacturers are keen not to tamper with the products and simply focus on new marketing techniques, others look to give gifting favouites a fresh spin each year.

According to Walker, Quality Street is considered by some retailers to be 'the Creme Egg of Christmas'. To expand the brand, Quality Street Matchmakers will benefit from a £1m marketing campaign which will take in both print and digital platforms.

Top tips
Stock up on chocs. It is incredibly valuable for retailers to make sure they are well stocked up on Christmas confectionery to play up to the seasonal festivities. Chocolate aligns with Christmas sharing occasions and consumers expect to find seasonal variants of their favourite brands Always create a seasonal area, no matter how small. Shoppers are four times more likely to visit the seasonal aisle than the regular confectionery aisle and will spend more than twice as long browsing Choose prime spots. As with standard confectionery, put your biggest brands in the best spots usually at eye level - and multi-site fast selling, impulsive lines Get your seasonal stock right. Stock a limited range of boxed confectionery products in all sizes there are clear purchase occasions at Christmas-time for all sizes and as such shoppers will buy different sizes for different reasons. If space is a real issue, retailers should focus on larger sized box variants, which will make them more money for the space they occupy Rise to the occasion. Create some theatre in the run up to Christmas decorate your store to bring back that feeling of nostalgia. This is one of the year's biggest retail occasions, after all. 

Source: Mars
An on-pack promotion for Christmas 2010 sees Nestlé team up with online DVD rental service Empire to offer two months free DVD rental to kick off the new year.

Nestlé has also taken a look at packaging for the Quality Street My Favourites line, which saw sales rise 18% year on year in the convenience channel in 2009, according to IRI.

"We know that retailers don't have a lot of space on the counter," says Walker, "so we've redesigned the outer as a Christmas chimney so we can reduce its footprint."

Kraft is giving its traditional gifting favourites a fresh spin, too.Toblerone will get a seasonal packaging redesign and a £2m marketing campaign, while Terry's All Gold, which Mounty says accounted for more than a third of traditional boxed chocolate consumption last Christmas, will get a new festive look.

Although taking notice of the big brands' plans for seasonal gifting products is important, Hancock's Summerley urges retailers not to ignore gifts that suit customers looking for extreme value. "Last year we stocked a wide range of token gifts to be retailed at just £1 and it worked very well for plenty of our customers," he says.

However, he adds that retailers looking for value stock should also look beyond £1 price points, explaining that higher price points can reward retailers with higher margins.

"Don't focus so much on the £1 range that you miss slightly higher priced opportunities keep the blinkers off," he warns.

Sticking with tradition

While the gifting category shows sales increases year on year, the traditional Christmas category (which includes novelties, selection boxes and advent calendars) saw value sales decline slightly by 2.2% to £118.6m in 2009, according to Nielsen.

So is it time to turn Scrooge-like and reduce the shelf space given to more traditional Christmas fare? Maybe not, since advent calendars and selection boxes alone are still worth £16.3m and £31.2m respectively.

"We've done a lot of research and found that for many consumers, Christmas would not be Christmas without a selection box," says Cadbury's brand manager Kate Whitehead.

"It's a habitual purchase that they buy every year along with the cranberry sauce. For us, it's a case of monitoring what's inside and ensuring that the products remain relevant.

"Advent calendars signpost the beginning of Christmas, but they become irrelevant after November 30. Because of this, advent calendars need to be highly visible and signposted to remind consumers to pick them up."

Despite the decline, Cadbury's traditional Christmas offer last year achieved a growth of 3.9%, largely due to its success in the novelty sub-category. In fact, according to Nielsen, Christmas novelties account for 10% of all Christmas chocolate confectionery sales.

In 2009 Cadbury's share of novelties grew to 18%, spurred on by the success of Snow Bites, novelty chocolate balls surrounded by a white dusted shell. Snow Bites brought new shoppers into the category, with 37% of its volume coming from new buyers.

Top five from...
1 Cadbury Santa Selection Box 

2 Cadbury Dairy Milk Advent Calendar 

3 Cadbury Snowbites 

4 Cadbury Winter Wonderland Selection Box 

5 Cadbury Snowman Selection Box 

Source: Cadbury
In a bid to build on this performance for this Christmas, Snow Bites are being redesigned with a 'warmer' feel for 2010, including a better description of the product on the packaging, plus a more prominent logo.

According to Nielsen, the sub-category showing the most growth in novelties is figures and shapes, up 18%.

"Novelties is the best-performing sector. It is key to driving profitable growth at Christmas, so retailers need to ensure that they make the most of this seasonal opportunity by giving this growing category its fair share of space," says Ferrero UK sales director Jason Sutherland.

To encourage further growth this Christmas, Kinder is launching the Kinder Father Christmas with Surprise Toy, a santa-shaped hollow chocolate that comes complete with a present inside.

While some commentators may say that doing something good for people considered less fortunate is a novelty in itself this year Cadbury is encouraging consumers to do just that. In 2009 Cadbury hooked up with the Make-A-Wish Foundation UK, a charity which grants wishes to children with life-threatening illnesses.

To drive awareness of the partnership Cadbury is launching a new chocolate novelty product called 'Wishes'. Some 10% of all profits made from the sale of the products will be donated to the foundation to help more children's wishes come true, which should give both shoppers and retailers a feel-good festive glow that lasts right into 2011.

Ones to watch... 

Economy drive: Hancocks has a range of £1 gifts for Christmas including Lonka Fudge Pouches, Chocolate Creams, Turkish Delight and cartons of liquorice allsorts, wine gums and jelly babies. tel: 01509 632871 

Open all hours: The Barratt Sweet Shop has everything budding retailers need to run a shop including press-out money, a till-point and plenty of sweet stock. rrp: £5.99 tel: 01253 761201 

Christmas kisses: Retailers after some sexy seasonal sales should seek out these indulgent Galaxy Mistletoe Kisses for an extra dose of till-point stimulation over the festive period. rrp: 59p tel: 01844 262517 

Polar express: Nestlé is adding to its growing Milky Bar menagerie with a Milky Bar Polar Bear this Christmas. The polar bear targets the kids' stocking filler market. rrp: £2 tel: 01904 604 604 

Shaw-fire success: Elizabeth Shaw has launched a collection of dark and milk mint chocolates infused with mint oils. The Mint Selection contains 30 mint crisps, Neopolitans and mint cremes. rrp: £3.99 tel: 0117 937 120