Nielsen client team leader Rob Hallworth makes some predictions for how shoppers are likely to behave this festive season.
Hands up if you’re looking forward to a more “normal” Christmas this year? But what will normal look like? In 2020 Christmas was all but cancelled, with UK lockdowns introduced at short notice and the hospitality industry at limited opening hours or closed for the majority of November and December. However, the off-trade saw an increase in BWS sales of almost £950 million (19%) during the festive trading season of 12 weeks to January 2.
Fast-forward to now and with approximately two-thirds of the UK population fully vaccinated can we expect the return of bigger group occasions this year that did not happen last year? We only need to look at the boost to Champagne sales over the past year (up 32% on 2019) to highlight the nation’s appetite to celebrate.
That being said, having now passed Freedom Day and the on-trade effectively fully open, we are still seeing a significant uplift in off-trade sales compared with pre-Covid levels. Value sales of BWS are up 12% on the equivalent weeks of 2019, suggesting there is still some reluctance to return to out-of-home venues and some of the behaviours formed over the past 18 months have remained.
So, what can we look forward to?
Christmas 2021 looks set to be a bumper year for spirits. In the six weeks after Freedom Day, value sales are up more than 14% on 2019. This, coupled with promising on-trade sales, shows the demand for spirits and represents a big opportunity to tap into the trend of cocktail making that has grown with more at-home occasions. We can expect flavoured spirits in particular to make some noise, with a wealth of NPD across gin, rum and vodka. Expect to see a strong push in stores earlier than ever as consumers look to celebrate this year.
Throughout the pandemic we have highlighted two key groups of shoppers: Insulated and Constrained. As the furlough scheme comes to an end in September, we can expect the constrained shoppers to feel the impact, leading to a Trade Up versus Trade Off situation.
Premiumisation looks set to continue as we have seen over the pandemic and, while not directly comparable to the recession of 2008, replicating the on-trade experience at home could be a lasting trend again this Christmas and into next year.
One of the barriers to a bumper Christmas could be availability. Nielsen IQ research highlights that BWS on-shelf availability has dropped over 2 percentage points in the year to date on pre-Covid levels as pressure hits supply chain. As we run up to Christmas this will be felt even more, so manufacturers and retailers who can manage demand will put themselves in pole position to have a successful Christmas trading period.
Whatever “normal” looks like this Christmas expect significant growth on pre-Covid levels as consumers look to make up for lost time.