Thursday, 25 November 2021
Christmas is by far the biggest thing consumers are looking forward to over the next few months according to consumer research agency Two Ears One Mouth.
But many will be wondering what this year’s festivities will look like following the unprecedented Christmas of 2020. Last year, with COVID restrictions in place, three quarters celebrated with fewer people than normal. Therefore many will be eager to make up for lost time and bigger social gatherings could be top of people’s agendas. However are we primed for more disruption? Media attention in recent weeks has not only focussed on rising COVID cases, but also pressures on food supply chains potentially causing shortages, especially with turkeys, and price rises. In October, the Office for National Statistics reported that 61% of people had to alter their normal food shop, linked to products being out of stock. This is at a time when shoppers’ baskets may also be dictated by changed financial situations with the pandemic. If reports come to fruition we could be in a situation where even if shoppers want more from their Christmas, it may not be possible.
Considering the above what do we predict this means for grocery?
- Christmas is the biggest event in retail calendars and pre-COVID typical spend the two weeks before the big event rises 22% versus an average two weeks of the year. In 2020 with more in-home occasions it was grocery’s biggest ever Christmas, worth £1.8bn more than the average month (Kantar, 4 w/e 27 Dec 20). While 2021 does give us the possibility to venture out-of-home again many still have trepidations about this. Therefore Kantar predict that grocery sales Christmas 2021 will remain significantly inflated versus 2019 (+10%), but down versus 2020 (-3%).
- With Christmas 2021 falling later in the week (a Saturday) spend would typically be concentrated in Christmas week, particularly Thursday 23rd will be a key day. While this will still be the case, due to the media speculation on food shortages, we could start to see some shoppers plan for Christmas much earlier…with some retailers such as Aldi reporting four times the usual amount of turkey crowns being sold in October!
- A COVID legacy behaviour is undoubtedly online shopping and Christmas slots are predicted to be like gold dust again this year with some retailers opening slots early, which go as quickly as they are added. However, the importance of the physical stores is still apparent accounting for 88% of grocery sales in the w/e 5th September (Kantar). But with some shoppers still wanting to minimise social interaction the trend pre-COVID of shopping around may be more muted this year, with shoppers potentially sticking to one retailer.
- Christmas is typically a time for trading up but as mentioned we see an increased number of households that financially have been adversely effected by COVID. Therefore forced to seek value and potentially trade down. On the other hand others have been able to save money and can afford a great Christmas blowout. Therefore with such polarised spending ability there is a role for all tiers to play in-store, with potentially more trade up potential on discretionary items such as extras and desserts.
- Early lockdowns saw scratch cook occasions rise. However, some consumers have found it very easy to revert back to convenience as normality has resumed. With Christmas gatherings currently on the cards there may be a desire by the chef of the household to spend more time socialising, rather than being stuck in the kitchen. Therefore inspiration focusing on pre-preparing and cooking shortcuts may be more important this year, while not forgetting those who want to go all out with indulgent meal prep.
For red meat 2020 was the best Christmas on record, out-performing both turkey and whole fish. But what can we expect this year?
- Christmas traditions are hugely important to consumers, with turkey continuing to lead the way as the main meat, and over a quarter of households bought a gammon in the final two weeks of 2020. However, last year we saw many households switch from turkey to red meat, as fewer, or no, guests meant people could cater to their personal tastes. This benefitted beef roasting joints in particular, which grew 18% (4 w/e 27 Dec 20). While we predict some will revert back to turkey this year it does provide a good foundation to remind consumers of the great taste of red meat to help maintain momentum from 2020.
- Undoubtedly bigger joints will be in demand this year. But there has been a longer-term trend towards smaller joints, even pre-Covid, so offering a range of sizes is important.
- Frozen meat will have a stronger Christmas to mitigate the concerns of supply and demand, but also to help people managing their budgets.
- With tradition key trimmings, including Pigs in Blankets (or their separate components), will be a must. As mentioned above encouraging trade up to premium or ‘special’ offerings could help this category.
- With over a quarter of us planning a bigger than usual Christmas this year, meat-based party foods can capitalise on additional social gatherings, a category that struggled last year. Ensuring in-store and online visibility is vital.
- Butchers had a bumper Christmas last year. However, sales have slowed more recently. Inevitably with noise around supermarket shortages some consumers will turn back to butchers. They will need to remain agile, in terms of both stock and service, and remind people of the quality products and local sourcing to gain loyalty.
2020 was also a great Christmas for dairy with spend up 14.1%, growing faster than the market. All categories in dairy saw strong growth but what can we expect this year?
- Christmas provides an additional boost for cheese. In 2020 cheddar was the biggest contributor to growth, but the fastest growing cheeses were halloumi and mozzarella, boosted by more everyday meals at home. This was at the expense of cheese boards and specialities which lost share due to less gatherings. Therefore with more celebrations on the cards we predict a recovery for these more traditional Christmas cheese board offerings, such as Wensleydale, brie, stilton and camembert which in normal years enjoy a strong seasonal uplift.
- Also benefitting from bigger gatherings will be bigger pre-made desserts, as well as ingredients to make or bake your own, benefitting milk, butter and cream.
- December is always the biggest month for cream but with much more of an indulgence angle in 2021 will it reach a new high as an affordable treat to elevate a dish or pudding? And we predict that alcoholic cream, a typical Christmas favourite, which grew slower than total cream last year, could see a surge.
To find out more about the importance of events for AHDB sectors, written prior to the pandemic and therefore a more accurate comparison for this year, than last please see the AHDB Eventing Report