Christmas seems to get earlier each year. For the c-store retailer it should be starting right now.
Hancocks purchasing director Richard Brittle says you should get in early. “Independents can benefit from having a good Christmas display in place by the end of September,” he says. “Products such as Advent calendars, tree decorations and gifts for workplaces are often snapped up early.”
The message for c-stores this Christmas is: know your customer and make sure they know what you have on offer. According to most of the manufacturers Convenience Store spoke to, retailers are losing Christmas sales by not signposting their offering and not tailoring their range to their customer base.
And there is profit to be made, especially in confectionery. More than half the population bought Christmas confectionery in 2004 and there was increased spend per trip (source: AC Nielsen/TNS (CSV)/Masterfoods). Among the categories showing good signs of growth are branded gifts, up 4.5%, tree decorations 5.5% and tubes 3.5% (source: AC Nielsen/TNS (CSV)/ Masterfoods 16 weeks to WE 25.23.04).
“Christmas should be a huge opportunity for independent retailers,” says Brittle. “With careful thought, they can offer their customers a profitable and exciting range of confectionery.”
Hancocks has 236 seasonal products this year, of which a high proportion are main brands.
Masterfoods trade relations manager Andrea Taylor says: “It’s a huge marketplace, and retailers are definitely missing out by not capitalising on the opportunities.”
Kraft Foods channel and communication manager Sarah Petts says that by not being aware of the potential of the season, retailers can miss out. For example, 66% of Terry’s Chocolate Oranges are sold during the Christmas period. “Christmas is very important for us, with more than 40% of gifting and sharing products sold between September and December.”
GETTING IT RIGHT
The key to a good Christmas, says Cadbury Trebor Bassett head of customer relations Mike Tipping, is understanding what the holiday means to people: “Christmas is about giving, about families being together, about magic. Christmas is a very emotional time and you have to tie into that emotion by making shop displays special and not treating Christmas as a commodity.”
The plus point for retailers at Christmas is that when shopping for confectionery people rarely make a list. This is why the right ranging can help customers feel they’re getting a real choice. Consumers purchase confectionery at Christmas for a number of reasons, such as for sharing with family and visitors, as a gift for neighbours and as a special treat, which encompasses the premium end of the market (for more on premium category Christmas launches see the Boxed Chocolates feature in the next issue of Convenience Store).
Ranging needs to take into account all of these needs. Brittle says: “Don’t just leave it to your customers to decide what items they need to buy from you for Christmas. There are many more needs that can be satisfied by confectionery at Christmas, and if customers are prompted properly while in the store, they might just do something about them.”
Other needs include gifts for teachers, company gifts and stocking fillers. Bosses often buy their workers gifts to say thank you at Christmas, so for retailers in an area which has a lot of offices, volume discounts might be appropriate - as long as you remember to publicise the deal, perhaps with a leaflet drop to local businesses. Brittle says: “If a retailer has a strong display of different product ideas to suit these needs, and even constructs some basic promotional material to highlight the message, they can profit from the additional sales volume.”
However, Petts warns of getting too carried away: “I think retailers tend to stock a huge amount of SKUs and sometimes have no real idea what to stock. They need to think through the best sellers and sightings.” Taylor agrees: “Less is more - 10% of brands achieve 80% of sales [TNS]. Don’t go overboard: look at the top 10.”
Nestlé Rowntree sales communication manager Graham Walker says retailers should focus on the main brands - “the safe stuff.” He says that stocking sufficient facings of good brands also prevents over stock at the end of the period. “Retailers sometimes buy a lot of Christmas items with no real idea of the quality. Then it’s the branded stuff which mum feels comfortable with that sells out. Retailers then get stuck the the rest of the stuff.”
As for competing with multiples - the advice is: don’t. Instead, focus on your differential and your customers. Says Tipping: “The main problem is that retailers tend to focus on price. The perception is that products have to be cheap and are always driven by price. But what customers want is availability and a fixture they can shop easily and efficiently. It’s about impact and having the product right up to Christmas. Remember that a large amount of Christmas shopping takes place in the last two weeks, right up to Christmas Eve.”
Walker says retailers should be aware that the true essence of Christmas is concerned with giving and therefore customers will want to take a closer look at what they’re buying: “A lot of retailers will take stock and stick it on the top shelf where people can’t touch it and look at it.
“They need to devote a proper area within the shop and devote a proportional amount of space to each individual category. They must consider their local community and the kind of people who live there. For instance, if the shop is near a housing estate then it makes sense to stock lots of family-oriented products.”
With a bit of time and effort, say the manufacturers, there’s no reason why this Christmas shouldn’t be very merry indeed for c-store owners and their customers.
MASTERFOODS is driving sales of its selection boxes with a new ‘& Friends’ theme. Mars, Milky Way and Maltesers selection boxes retail at £2.29, and three Mega selection boxes - Mars, Maltesers and Galaxy - retail at £2.99. In the stocking-fillers sector the company has introduced Santa Cups, santa-shaped packs filled with Mars or Milky Way funsize bars retailing at £2.49. Advent calendars are always good to drive early sales at Christmas, and Masterfoods last year had three of the top five best performing calendars. This year the company has relaunched its Galaxy Advent Calander with a mix of Galaxy and Galaxy Caramel miniatures, retailing at £2.49.
NESTLE ROWNTREE is giving a push to licensed products for Christmas to drive value back into the category, reckoning that parents are prepared to pay for a strong, innovative proposition. The company has the sole confectionery licence for Charlie & the Chocolate Factory and products will include a Wonka Special Cane retailing at £1.99. Another movie tie-in will be The Chronicles of Narnia: The Lion, The Witch and The Wardrobe, released in December and celebrated in a selection box (RRP £1.99). For men, Nestlé has launched several Christmas products for the Yorkie brand including a Yorkie pint glass pack and Yorkie Roulette with bars of Chilli Yorkie. Confectionery with free extras include a Wonka Premium Selection Pack with a book for kids at £3.99 and the Disney Princess Dressing Mirror selection pack with dressing mirror and hair clips (£3.99). The Winnie the Pooh Easel Board selection pack opens up to reveal an easel, drawing board, drawings and crayons.
CADBURY is focusing on masterbrand leadership driven through Cadbury, Maynards and Bassetts and has rationalised the Christmas range which this year will carry the theme ‘Magic of Christmas’. The company’s ‘fewer, bigger, better’ strategy will focus on the brands, Cadbury’s signature colour purple and the strong Christmas message which, the company says, will firmly connect Cadbury’s and Christmas in the consumer’s mind. The range includes advent calendars, tree decorations, selection packs, tubes and novelties. The company has standardised the width of the selection boxes to help with merchandising. In Advent calenders, white buttons has been replaced by Cadbury Dairy Milk. Cadbury’s is also doing several special impulse-only lines including a selection box at £1.49 and a Cadbury’s Roses 1.5kg tin, exclusive to independents, for £11.99.