Preparation is the key to having a successful festive season, according to Paul Lettice, trade communications manager at Procter & Gamble. "Retailers who are prepared to think in advance about their Christmas offering, point-of-sale requirements and stock-level needs are those that will benefit most significantly from the opportunities presented by this key selling time of year," he says.
And before you start thinking that those rising interest rates and bigger mortgage repayments will dampen spending, you’d be advised to think again. That’s because despite the difficult trading conditions of last Christmas (rising interest rates and energy prices) more than £12bn was spent on gifts. And the average spend per gift was just over £27. The figures come courtesy of TNS GiftTrak, which expects similar spending this year.
Of course forecourts won’t get much of that gift spend - stocking fillers in the form of chocolates or a car care kit are probably the best they’ll do, but Christmas throws up all sorts of other opportunities. Consumers put on lavish spreads for friends and families, with many trading up to brands to impress their guests. And although most of this fare will be bought elsewhere, there are still opportunities to cash in - on items shoppers have forgotten or on last minute top-ups of things like soft drinks and snacks.
Kenny Chisholm, shopper marketing manager at Coca-Cola Enterprises (CCE), comments: "Consumers are more likely to spend more to treat themselves, family and guests at Christmas and are more likely to buy brands at this time of year. Research shows that 4.3 million households bought CCE products over the Christmas week in 2006, so we know there is a huge opportunity for retailers to drive sales and profit."
TNS data for the four weeks ending December 31, 2006, values the Christmas soft drinks category at £236m, the fourth biggest in ambient grocery. Chisholm advises retailers to keep fully stocked to ensure they don’t miss out on last-minute sales. "The main focus should be on heavy consumers and light occasional consumers. With frequent soft drinks buyers, the best strategy is to maintain and drive loyalty. To boost sales among occasional buyers, it is important to encourage early purchase with visibility of product displays."
CCE is really getting into the festive spirit by giving consumers the chance to win Christmas treats. Its latest on-pack promotion, running across 500ml bottles of Coca-Cola, Diet Coke and Coke Zero, gives consumers the chance to win a ’family holiday of a lifetime’ to Lapland, or they can choose to turn their home into a real ’winter wonderland’ by having boxes of snow, trees and lights delivered to them and set up on Christmas Eve. The third prize is a top-of-the-range Samsung home entertainment system with a 32" LCD TV plus a selection of the latest family DVDs.
Coke is obviously a big seller but Chisholm says Christmas is also a key time for Schweppes. "It is important for retailers to stock Schweppes lemonade, mixers and Straightcut from early November." In addition, a new Winter Blend lemonade with an adult flavour is available in 1.5ltr bottles.
Meanwhile, Scottish & Newcastle UK head of customer marketing (off-trade) Craig Clarkson says that with Christmas Day falling on a Tuesday this year, he expects many consumers to wait until the last weekend to stock up on key brands. Just like soft drinks, he points to the trading-up opportunity where consumers entertaining friends and family will want to offer them high-profile brands. But he adds that there’s also ’personal reward’ to consider: "This time of year is an ideal opportunity for retailers to take advantage of this by helping shoppers to indulge themselves by trading up to premium brands such as San Miguel and Kronenbourg 1664 and speciality brands such as Kronenbourg Premier Cru and Kronenbourg Blanc."
== Choc tactics ==
According to TNS GiftTrak, confectionery is the fifth-largest Christmas gifting category, after clothing, toys, toiletries, cosmetics and computer hardware/software.
Dave McNulty, instant consumption channel customer director at Kraft Foods, comments: "Chocolate has a universal appeal which makes it an integral part of the festive season. It is worth £1.1bn at Christmas, driven by gifting and sharing, which accounts for 48.5% of the market."
McNulty reckons that consumers are increasingly looking to the convenience sector to make impulse confectionery purchases: "Over the main four weeks of Christmas, the convenience sector accounted for £139m-worth of confectionery sales. This suggests that although consumers are starting to do their Christmas shopping earlier, they still go to c-stores to purchase last-minute top-up or token gifts."
He reports that Terry’s Chocolate Orange had a ’fantastic’ Christmas last year, achieving £13.8m-worth of sales, with 8.9 million balls sold, which is one million more than in 2005. To maintain consumer interest in the brand, Kraft Foods has launched two limited editions for this Christmas: dazzling dark mint and cosmic toffee crunch. Says McNulty: "Past limited editions have been proven to drive sales. They create excitement at the point of purchase, bring new customers to the brand and encourage multiple purchases."
Toblerone too enjoyed a good Christmas last year. McNulty says the 400g size is most suitable as a gift and, according to AC Nielsen figures, was the number one large tablet for cash and unit rate of sale in the 16 weeks to December 30, 2006. Once again festive sleeves will be available to increase the product’s gift appeal.
Christmas is also a significant occasion for boxed chocolates, generating around half of the market value. Gabrielle Bond, trade marketing manager at Bendicks, says retailers should plan their Christmas fixtures early to avoid last-minute out-of-stocks as each year many consumers leave festive shopping to the last minute. "Seasonal chocolate is important in driving footfall to the fixture. Ideally forecourt retailers should place boxed chocolates on at least two sites in store - one for planned purchases within the usual boxed chocolate fixture, plus strategically-placed impulse fixtures at the end of aisles and close to checkouts. Boxed chocolates are often last-minute purchases when shoppers realise they’ve forgotten a present for someone or want to add something extra to a gift they’ve already bought."
She also stresses the importance of maximising the after-dinner mint opportunity: "There are 13 million ABC1 households in the UK with special dinner occasions on Christmas Day, Boxing Day and over the New Year - that’s potentially 39 million ’usage opportunities’."
Other essential Christmas nibbles include savoury snacks, and IRI figures show that 43.7% of shoppers buying Pringles at Christmas time. For this Christmas, P&G is running various promotions across the snack range including ’buy one get one free’ on 230g packs. Specific seasonal activity includes an ’X factor’ style tour of stores where consumers will be encouraged to record their own ’Jingles for Pringles’. This will be supported by a nationwide contest to find the Pringles Christmas family. Consumers can enter online at [http://www.pringles.com/Christmas] by uploading videos of their family singing a Christmas song.
The winning family will star in a Pringles ad on prime-time TV on Christmas Day. Pringles will also be supported by its biggest ever marketing campaign over Christmas. And to generate interest in store a range of display material with a ’Merry Pringles’ theme will be available.
Says P&G’s Paul Lettice: "With many people getting together for both planned and ad hoc gatherings of friends and family, selling opportunities for sharing snacks are increased so retailers should stock up."
== Talking turkey ==
Of course you can’t mention Christmas without mentioning turkeys. Matt Pullen, marketing director at Bernard Matthews, says mid-November tends to be the time when consumers start to think about their Christmas meal, so he recommends retailers start stocking frozen turkey options at around that time.
"Obviously there is always a peak in the week leading up to Christmas with people who have perhaps been too busy to buy before or who have just left it until the last minute, so retailers do need to bear this in mind and prepare accordingly."
Pullen adds that a convenient alternative to the traditional whole turkey is a turkey breast joint or turkey crown, which appeal to the growing numbers of one- and two-person households, and can be easily stocked and merchandised in stores with limited freezer space.
Bernard Matthews Golden Norfolk brand currently holds a 66% share of the frozen traditional turkey category at Christmas but the company expects to increase its share via the introduction of a range of 1kg Golden Norfolk turkey breast joints.
These premium British joints feed between four and five people. They come in three flavours: butter basted; pork, sage & onion stuffing; and bacon topped with a pork, sage & onion stuffing.
The launch will be backed by a £1m marketing campaign which will include TV advertising.
== Charged up ==
Finally the non-food lines and the big one has got to be batteries. With 40% of all battery sales made in the run up to Christmas, forecourts need to make sure they are stocked up in order to get their fair share of sales. According to IRI figures, Duracell is the brand leader in batteries and as such an absolute must stock. Another good reason to stock the brand is its latest promotion: four free cells when consumers purchase special four-packs of AA and AAA Duracell Plus and Duracell Ultra M3.
P&G’s Paul Lettice says: "This great promotion will increase uplift in the battery category for retailers over the busy Christmas season, by offering consumers the most recognisable brand on the market with a great value proposition.
"Free cells are extremely popular with consumers and similar activity during Christmas 2006 boosted sales by 69%."
Aside from chocolates, the other gift item suited to forecourt shops is something from the car care category. Vicky Jones, marketing services manager at Tetrosyl, reckons car care gift packs make ideal Christmas presents.
"They are a useful gift for drivers as the majority of people take pride in the cleanliness and appearance of their vehicles. Add the fact that the gift pack can be picked up conveniently and affordably while consumers are topping up with fuel and this surely makes car care gift packs a must-stock item."
She says CarPlan offers a wide variety of gift packs including the T-Cut Professional and T-Cut Shampoo & Scratch Kits for the serious car lover.
There are also the Groovy Babe and Bad Boy Car Care Kits for young or young-at-heart drivers, both of which contain novelty items such as fluffy dice.
"Car air fresheners are key impulse lines and seasonal air fresheners offer added interest and create additional sales," says Jones.
New for this winter is the CarPlan flashing LED Snowflake air freshener, with an ’ice scent’ fragrance and blue flashing LEDs. It comes in a counter display unit of 24 individually-boxed air fresheners suitable for merchandising at the till point.