The numbers are in and the headlines have been written, with some branding it the worst December on record for retail. Total FMCG sales were up 0.8% with shoppers doing more top-ups that meant they were spending less per supermarket trip.
We know that alcohol increases in importance for FMCG in the festive four weeks, contributing around 15% of value, compared to 11% during the rest of the year.
But the off-trade festive trading season actually starts in mid-October and finishes a week after Christmas to capture New Year’s Eve sales, which leaves the trade with a reporting period of 12 weeks.
In the 12 weeks to January 4, total off-trade BWS was down 0.2%, which represents a decrease of £8.4 million in value over the same period the year before. Putting this into perspective, the off-trade enjoyed 4% value growth at Christmas 2018, up £187 million.
This year, the bit between Christmas and New Year was when BWS enjoyed significant growth on the previous year.
From December 29 to January 4, BWS grew £21.4 million. This week was great for every category except cider, with beer the biggest winner. Without this final week, the off-trade would be reporting a decline of 1% across Christmas 2019.
This just goes to show that even when key pre-Christmas trading is done, the off-trade still plays an important role for shoppers and stores.
At Christmas 2018, gin was the big winner across the off-trade, growing at £86.5 million and bringing incremental spend into the spirits category, driven by new listings and premiumisation. Flavoured gin led growth but traditional gin started to plateau.
The trend towards flavoured gin was even greater this Christmas, with sales growing by £13 million, or 12.8%, while non-flavoured gin went in the opposite direction, with a decline of £12.2million, or 6.7%. We saw around 40 new gin products on-shelf in the off-trade, and around 90% of these were flavoured.
There is talk of gin hitting saturation point, as happened with Prosecco, with huge numbers of products appearing in stores, all competing for the same basket spend.
Christmas 2020 will need to see more optimised shelves for the gin category. Top sellers and staggered pricing will be key to delivering growth next year.
With BWS making up such a large part of total FMCG sales, drinks will always be hit by wider macro-economic trends but 2020 comes with plenty of potential for success.
Hard seltzers are set to land, which will boost RTD sales. The summer will see the European Championships in football – with games in Scotland and England, including both semi-finals and the final – and the Olympics. These events will be pivotal in driving growth and setting the category up for a stronger Christmas.
Though Christmas 2019 might not have been as robust as recent years, learnings from this year will be key ingreidents in the recipe for success at Christmas 2020.