Stephen Jardine: Season to be jolly for retail sector

Christmas food shopping will give a big clue as to where and how consumers will be doing their shopping over the next 12 months. Picture: Contributed

For food and drink retailers, the next ten days are the most important of the year.

The groaning shelves, piled with produce, represent the culmination of months of planning, logistics and product development.

An awful lot rests on shoppers playing ball but the good news is, returning consumer confidence indicates this could be a happy Christmas for the food and drink sector. According to research group IGD, almost 20 per cent of consumers say they plan to spend more than last year on eating and drinking over this festive season.

Consumer confidence is most easily measured in the way shoppers approach the Christmas meal itself. In tough times, frozen turkey sales rise as people look to make savings.

In contrast this year, 18 per cent of consumers say they will spend more on Christmas lunch or dinner than last year. That’s good news for the free range and organic sector where confident consumers traditionally spend more. Butchers and farm shops and independent grocers should benefit from the increased spend which means supermarkets have to find added value in other products in their range

According to the research, another key trend this year looks like being the rise of online food and drink shopping. The days of fights in the aisles over turkeys and long queues at the tills may be numbered.

The prime home delivery slots are already filled and 17 per cent of people say they will do their main shopping online this year, compared to 14 per cent last year.

Consumers may feel comfortable spending more but online retailing makes it easy to shop around.

That explains the huge spend on advertising campaigns to attract hearts and minds but there is another weapon increasingly being deployed.

Just as John Lewis pioneered the landmark Christmas TV adverts, their food arm Waitrose was the first to use showstopper hero products to try to stand out.

The Heston Christmas range is designed to attract attention and capture those shoppers prepared to spend more for something special, from Heston’s Hidden Clementine Xmas Pudding to his Toffee Apple Mulled Cider.

Over at Marks and Spencer the emphasis is on big crowd pleasers with a Chocolate and Orange Melting Middle pudding so much of a part of their Christmas push, it even features in the their festive TV advertising.

The big unknown this Christmas remains the discount supermarkets who continue to challenge established players. It’s estimated 69 per cent of shoppers will visit Lidl, Aldi or Iceland between now and Christmas Day. Not content with that, even the discounters are developing products to try to draw in the remaining 31 per cent.

Lidl hired an ex-Heston Blumenthal chef to develop its Deluxe with Love premium range and Aldi’s Favourite Things collection includes everything from cooked Canadian lobsters to Christmas Puddings topped with edible gold.

All of this is a taste of things to come. Having cornered the budget end of the food and drink market, the discounters are hungry for growth and targeting more affluent shoppers. The strategy revolves around giving them fewer reasons not to cross the threshold and a few must-have spectacular offers at Christmas are key to that.

Our food and drink spending over the next couple of weeks will give a big clue as to where and how consumers will be doing their shopping over the next 12 months.