Poll shows reasons for Christmas cheer

Retailers are confident they will enjoy a stronger Christmas trading period in 2014 than last year, citing an improving economy and a healthy year of sales as reasons for optimism.

OLN polled hundreds of independent wine merchants, convenience store owners and buyers at multiple grocers and found that 49% thought Christmas 2014 would be an improvement on last year.

Just 14% said it would be worse, while the remaining 37% said they felt it would be the same as 2013.

One said: “Turnover has been higher month on month throughout 2014 compared to 2013 and we expect this will continue through Christmas. We anticipate a stronger Christmas this time than in 2013.”

Christmas 2013 was actually a relatively strong trading period as total BWS grew 0.1% (Nielsen, 12 weeks to January 4, 2014) compared to a 6.1% decline in the same period in 2012.

An improvement on this would give cause for festive cheer and one retailer said: “We have improved every year and I see no reason why this won’t continue, with shoppers growing more confident.”

When asked how business has been throughout 2014 compared to the previous year, 47% said it had been better, 34% said it had been the same and 19% said worse.

“We had a very good summer trade and the autumn weather helped,” said one retailer. “The economy is recovering and we are optimistic as we move into Christmas.”

Retailers’ main strategy to bring in more business this Christmas will be price promotions, with two-thirds saying this will be a focus. Gift packs and social media activity were the second and third most popular ways of drumming up extra business.

Price promotions will be more prevalent in the multiples, according to our survey, with 78% of head office executives saying they will be a focus compared to 64% of independents.

The Christmas price war is already kicking off as grocers slash the price of beers, wines and spirits to drive footfall.

Asda is leading the charge, selling 12 cans of Carling and 12 cans of Strongbow for £6.67 in Scotland and 36 cans for £20 in the rest of the UK [where multibuys are allowed], while another deal has seen it sell six bottles of award-winning Prosecco for £25 – which equates to £4.16 per bottle.

The retailer has also slashed the price of 70cl bottles of various spirits, including Russian Standard vodka, Cointreau, Disaronno, Bacardi and Captain Morgan, to £11.

Morrisons has competed by selling 70cl bottles of Smirnoff, Bacardi and Gordon’s gin for the same price.

But our poll suggests still wine will end up the biggest focus for discounts, with 76% of retailers planning to cut prices in this category. This is followed by beer, sparkling wine, Champagne and Scotch whisky.

However, the majority of retailers do not plan to increase their reliance on discounts this Christmas – 69% said they would use the same level of price promotions, while 24% said they would use more and 6% said they would use fewer.

The proportion of total liquor sold on promotion rose slightly to 57% in 2013 compared to the previous year (Nielsen, 12 weeks to January 4, 2014), but the average promoted price per litre also increased by 3.8% as retailers shunned many half-price deals in favour of less extreme discounts.

One retailer said he expected this trend to continue and added: “Price is important and small discounts that reward the customer are helpful, but ultimately quality is key.”

Another said: “We do not use price promotions – they are boring and lower the tone.”

Sparkling wine was the star performer last Christmas – up 14.8% in value (Nielsen) – and retailers expect this to continue.

“We could take an educated guess that Prosecco will do well this Christmas – consumers just love Prosecco,” said Asda head buyer Philippa Carr MW.

“We have a broad range at a wide range of price points to cater for this.”

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