Cost of living crisis drives Christmas confectionery sales boost
Luxury Chocolate have posted a Christmas sales boom in the UK, as shoppers seek affordable gifts. Pic: Neill Barston
Major confectionery brands have reported an upturn in sales for the festive season, as financially pressed shoppers have reportedly turned to offering gifts of premium chocolate as an alternative to more costly items, writes Neill Barston.
While the winter holiday season remains at ‘the top of the tree’ in the industry’s calendar, challenging economic conditions have further impacted on the market in the final run-in to Christmas.
Notably Fran McCargo, customer category manager at Nestle, revealed that the classic gifting trend for luxury boxed ranges was proving particularly popular among consumers, who have been hit hard by rising mortgage rate, food inflation and stagnating wages.
With retail inflation having hit a major high with the past year, consumers have been left reeling from the impact, with prices typically up 20% within the past 12 months, though the Food and Drink Federation has welcomed the easing of rates, which have yet to fully filter down into high street prices. In effect, many confectionery ranges in particular have suffered significant mark-ups due to inflation pressure this year, but even accounting for this, the market has remained comparatively resilient.
“Boxed chocolates have had a particularly strong start, with a year-on-year increase of 8.7% in value sales,” according to Fran McCargo, customer category manager lead for Nestle UK & Ireland, referring to the August-November period versus last year’s. Twistwrap chocolates have seen (sales) growth of 2.1%, to,” she explained, speaking to Reuters.
In addition, she noted that shoppers typically spent under £10 on such gifts, with Nestle’s Quality Street and Mondelez’ Cadbury selection boxes have been among strong sellers so far in December, as the nation seeks out affordable treats for friends and family this Christmas.
As Richard Parson, of artisan business Fudge Kitchen noted to Confectionery Production earlier this week, sales remain buoyant, despite challenging times. He said: “In the past year, economic downturn has necessitated reassessment of consumer spending across the confectionery sector, even when certain products often endure as accessible luxuries. “Confectionery and cosmetics traditionally weather such storms with resilience, offering small indulgences that bring joy even in challenging times.
HFSS compliance breaches
While a resilience in sales has been welcomed by the sector, the upturn in results for chocolate and festive snack ranges follows in the wake of a key report from the National Health Service (NHS) commissioned Food Active initiative, alongside the Obesity Health Alliance, which found that a total of 28% of retail stores had potential breaches of recently introduced HFSS legislation on placement of ‘unhealthy’ foods on aisles away from main checkout counter areas.
However, the research found that many of the smaller stores across the UK high streets, as well as larger stores out of town, have gone to some effort to redesign their stores for health – taking junk food out of the spotlight and replacing it with healthier food like whole fruit, nuts and water, and non-food items such as flowers, cards and newspapers.
In addition, the study said that it found that whilst most stores were operating within the spirit of the law, if not quite the letter, ‘less’ compliant, with fairly minor breaches, some stores were showing a blatant disregard for the
policy and for child health and were ‘mainly’ non-compliant. A total 18 of the 25 stores in the UK study (72%) were found to be ‘mainly’ compliant, with healthier (non-HFSS) food and drinks in key locations.
The impact of major seasonal promotions, including specifically for Christmas did not form a core area of the research, though the high retail value associated with Christmas treats and confectionery, has inevitably mean that retail stores of all sizes have devoted additional shelf space for specific festive ranges including confectionery.
