The last week of Christmas 2006 was the biggest ever seen (Source: Masterfoods/AC Nielsen) and this year, with Christmas falling on a Monday, shoppers gain an extra day to buy last-minute gifts and treats. That's why c-store retailers need to start thinking about their stock for this year's celebrations.
According to Hancocks purchasing director Richard Brittle: "It goes without saying that multiples will once again be a strong force, but with a carefully planned range and a good understanding of customers' needs, independents can make good profits at Christmas."
According to figures from Nestlé, consumers spend about £12bn on 491 million presents at Christmas with confectionery playing its part as the second biggest selling category for gifts under £10. It says Christmas accounts for 13% of independent retailers' annual confectionery sales.
More than 80% of the public
buy confectionery for gifting and sharing at Christmas - sharing alone was worth £384m in the independent sector in 2005 (Source: Nestlé). And chocolate confectionery is the only major sector in Christmas food sales that has grown at a faster rate than the market as a whole (Source: Mintel).
According to Mintel, boxed chocolates are driving the sector, accounting for 43% of sales. Mintel research showed that 45% of adults purchase a selection box at Christmas and 53% buy other confectionery.
According to Masterfoods trade relations manager Andrea Taylor, one of the main things consumers look for at Christmas is favourite brands in added-value packaging, which is why the company has launched Gift Cubes. The Cubes contain mini bars of Mars, Ripple or Mars Delight and will, says Taylor, deliver for bars what tubes have done for bitesize. The Cubes are aimed at anybody who feels too old for selection boxes and mums who want to find a gift with the right brand. They come in cases which can be merchandised sideways to save space and retail at £2.49.
Masterfoods claims that 60% of sales of its £64m Celebrations brand take place at Christmas, and tins - which this year have been made stackable - were up 7% last year.
However impressive the statistics, though, Taylor says that out of stocks in the last four weeks of the 2005 season led to a £5.2m lost opportunity for the brand. The company will be supporting the brand with a £2.5m marketing spend this year, a 25% increase on last year.
In the traditional sector the company has ramped up the Christmas theme with new packaging. Packages and outers now feature a fairy light motif for shelf standout and the '& Friends' selection boxes have lower case fronts so that consumers can see more of what's on offer and pull out the products more easily.
Last year the '& Friends' line did particularly well for the company with, says Taylor, a 29% growth year on year. She adds that Maltesers boxes also fare well, accounting for 25% of total Maltesers brand sales with 44% of boxes selling at Christmas. The brand is being backed with a £2m media campaign in the run up to Christmas as part of a £5m media campaign.
While Christmas must be the last thing on Cadbury's mind at the moment, head of customer relations Mike Tipping says that the recent Salmonella product recall will be gone and forgotten by the time consumers' minds turn to Christmas: "It won't be an issue," he says. "All our products are safe."
He says that the ethos behind this year's range has come from extensive research with shoppers and as such it has upgraded and updated the range.
The company leads the traditional Christmas market with a 34.5% share and within this has made changes to packages sparked by shopper research. Packaging is now using more Christmas imagery on both selection boxes and tubes, and there are different size selection boxes in different colours to choose from. Tipping says that selection packs hold a special place in shoppers' hearts: "You only see selection boxes once a year and therefore they are special. The retailer has to look at it from the shoppers' point of view. Christmas can become a little samey for the retailer but is very special to the customers. Therefore, retailers have to respond."
The company has changed the packaging on its Roses Luxury brand, prompted by feedback from customers who liked the product but wanted more of a premium feel.
In novelties, the company is launching Santa's Workshop - a 215g novelty pack filled with moulded Christmas shapes, rrp £3.49. Cadbury Dairy Milk Snowman Surprise is also new. This novelty hollow milk chocolate snowman contains an assortment of solid milk and white Cadbury chocolate snowballs. It retails at £4.99.
New to the premium range is Cadbury Roses Premium Truffle Selection, aimed at gifting and sharing. The individually wrapped chocolates include dark chocolate truffle, smooth and almond truffles and crunchy hazelnut praline truffle housed in a 200g box with a rrp of £3.49. The launch will be backed by a total of eight weeks of Coronation Street credits in two bursts, running right up until Christmas.
Tipping says: "Shopper research indicated that they are demanding even more from their retailers. They really want the store to reflect the magic of Christmas. Retailers who made the effort in 2005 recorded up to a 40% increase in sales."
Nestlé, meanwhile, is concentrating on the two brands which gave the company such success in 2005. UK trade communications manager Graham Walker says: "It made sense to focus on those and supplement them if necessary, then tie them in with the key trends of busy lives, balanced lifestyles and indulgence and sophistication."
With Quality Street - which Nestlé claims is the number one twist wrap with 29% share of the category - the company is launching new 800g tins of the toffees, caramels and fudges (rrp £6.99). The tins feature favourites such as Toffee Penny and Purple One and new sweets including banoffee, treacle toffee and creme caramel flavours. Another change comes in cartons, which now feature cutouts of favourite brands with see-through windows. Says Walker: "Now you can see what's inside, which helps the shopper cue in to what the brand is all about."
There are three new launches for After Eight. Grand Marnier flavour Straws with a rrp of £1.99, linking into indulgence and sophistication, and a milk chocolate version of After Eight mints. "The traditional pack has always been dark," says Walker. "But Milk chocolate is the consumer's favourite, and mint and milk chocolate is a tried-and-tested formula with Aero."
The milk chocolate variety will retail at the same price as the dark chocolate variety, at £2.79.
The final launch in the After Eight range is new premium bags (rrp £1.99), available in both dark and milk chocolate and wrapped individually. The After Eight brand will also be back on TV for the first time in five years with a £2m media campaign. Other launches from Nestlé for Christmas 2006 are Matchmakers Golden Honeycombe, Pink Smarties Giant Tubes for girls and Aero Bubbles Giant Tubes. The company is also launching a new selection box based on Disney film Cars, to coincide with the DVD launch for Christmas.
Walker recommends c-stores stock up early, beginning with the smaller products and tubes, which he says often warrant repeat purchases as they tend to get eaten before Christmas begins.
bendicks in the news
Another company that hit the headlines earlier this year is Bendicks. It net itself reams of copy by retiring the Grandad figure from the Werther's Originals television ads.
Bendicks trade marketing manager George McLearie hopes that the awareness created by the new £2m TV advertising campaign will raise the brand's profile considerably in the run up to Christmas. He says that while Christmas is more associated with chocolate there is no reason a sugar brand cannot do well alongside. Werthers Originals Tins will receive a contemporary new design in a bid to boost their appeal.
McLearie says that last year the company was the fastest growing branded supplier in the overall Christmas boxed chocolate market and is sticking with that winning formula this year - with some add-ons. Mingles is adding a new format with the Cracker Pack (rrp £3.49) for gifting, and Gorgeous has a new 200g pack (rrp £3.49). New 400g luxury pack (rrp £6.99) will have an improved design and enhanced finish.
All brands will benefit from a £2m TV advertising campaign starting in November and running through to Christmas.
McLearie says the company is looking more closely at independents. "One of the challenges we've got as an organisation is to work more closely with the independent trade and to share knowledge we have about brands and positioning within the independent sector."
He says that as Werthers has done well in this sector he sees no reason why Bendicks won't as well.
He adds: "At the moment it's predominantly the big three that have the voice in the sector, but the premium side of things on chocolate is a different offering and one that it's important not to ignore. It's not all about picking up a distress box of Celebrations; it's also about meeting a need for such things as after-dinner mints."
With more than 200 Christmas lines on sale in independents in 2005, retailers have a lot to think about when it comes to choosing ranges. Maybe now's the time to put away the sunglasses and dust down your red suit instead.
New this Christmas
? KRAFT is launching a Côte d'Or into the premium gifting and sharing market with Côte d'Or Oraia packaged in an attractive box with a rrp of £3.49. Kraft is also supporting its Terry's Chocolate Orange with a £2m media campaign. Toblerone will also feature seasonal sleeves on the 400g bar.
? Guylian has introduced new formats for its premium twist assortment. Also new is the Guylian Twist Christmas Bell which transforms into a bowl. New in the Seashells collection is a Chocolate Truffle Seashells line. The company is supporting its Christmas range with a £1.5m marketing campaign, beginning in October.
? Walkers' Nonsuch has introduced a 908g Famous Slab. The company has also put its hammer packs under a new Toffee Break name.
? Hancocks has added to its 99p products with Strawberry Creams 175g, Orange Creams 175g, Jamaica Truffles 175g and Coconut Truffles.
Hancocks' guide to ranging
Every range should include:
? Advent calendars and Christmas tree decorations (stock early)
? Impulse lines such as seasonal lollies and Nestlé Big Qs (place close to till)
? A good range of 99p products
? A small number of selection boxes (know your customers)
? Boxed chocolate lines - premium, sharing and after-dinner mints
? Traditional gifts such as toffee and liqueur chocolates
? Novelty gift items
Cash in on ice cream
One area in which c-stores often miss out on at Christmas is the opportunity to be had from ice cream sales. According to Ben & Jerry's senior brand manager Antonia Kaul, it's a time when retailers can cash in. She says: "There are two peaks in season for ice cream - the summer and Christmas and it's at Christmas that people trade up and look for premium products."
Richmond ice cream marketing manager Clare McIntosh agrees and says retailers need to get behind the season. "If you look at December sales, premium tubs are usually up about 30% in the total market but there is no increase in c-stores."
Last year Richmond relaunched the Rolo, Smarties and After Eight tubs with a permanent on-pack 'two for £3' promotion. McIntosh says that this year there will be another addition to the range, but isn't saying what that will be.
Of course, freezer space can be at a premium at this time of year so ranging is crucial and McIntosh points out that every product needs to earn its place.
Kaul says that when retailers realise what a great opportunity the Christmas season is they are usually quick to stock up on ice cream. "The sales figures speak for themselves. Ben & Jerry's usually launches a flavour for that season. This year it's vanilla toffee crunch in a bigger 750ml tub with at least 50% extra-fill free. It will be a limited edition available for six months."