The lead up to Christmas is a busy time in convenience stores as retailers attempt to gain those crucial sales that can help make or break their year. Drinks will be a key sales driver once again, so stock up on soft drinks, beer, wine and spirits for a huge profit opportunity.
by Émer O’Toole
With limited sales space and the inevitable pressures of the deals available in supermarkets, it is crucial for local retailers to get their ranging, merchandising and promotions right if they are to make the most of this key sales period.
There are 8.4 soft drinks purchases per shopper before Christmas and products are bought by shoppers more than once a week over this period. Retailers need to prepare for this spike in popularity by getting their product ranges right in order to cash in on the 95% of households consuming soft drinks during the festive season.
Last minute sales are crucial because, according to him!, 11% of shoppers started shopping on 20th December last year and 60% were still shopping from the 22nd-24th of December (with 22% still shopping on Christmas Eve). Therefore, retailers should maximise impulse sales by putting potential last-minute purchases on the way to the till.
And given sales of spirits are much higher at Christmas, it is also a key time for mixers. When ranging it is important to try to place your soft drinks alongside your spirits where possible, as this will encourage incremental and impulse sales and ultimately push up profits. If space allows, it may be worthwhile placing secondary sites outside of your usual soft drinks display areas, particularly in the week leading up to Christmas Day.
With Christmas being an expensive time of year, it is important to stock products that are affordable. Consumers must be able to make impulse purchases without feeling guilty, and pairing cheaper alternatives with market leaders will ensure every customer is catered to.
Soft drinks that are bestsellers all year round will obviously sell well at Christmas. Amy Burgess, Trade Communications Manager at Coca-Cola Enterprises (CCE) says “Coca-Cola is a brand that has become synonymous with Christmas, and that’s why sales of Coca-Cola grow significantly at this time year.”
Irn-Bru’s popular Snowman advert will return this December backed by a media campaign. The Snowman will also appear on 330ml multipacks and two litre packs of Irn-Bru throughout the festive period. Adrain Troy, Head of Marketing at AG Barr, said the advert has “won a place in Scottish consumers’ hearts” and AG Barr expects the special Snowman packs to “fly off shelves this Christmas.” Irn-Bru is also running a Christmas on-pack promotion on its 750ml glass bottles, as part of its continuing headline sponsorship of the Irn-Bru carnival at Glasgow’s SECC.
Drinks trends
Don’t underestimate the effect that trends can have on sales. There has been a recent surge in the popularity of adult soft drinks, while energy continues to merit additional shelf space. To the latter, Boost has recently launched a limited edition Winter Spice energy drink infused with plum, cloves and cinnamon flavours. Adult soft drinks, meanwhile, have grown by 7.2% over the last year with the aim of appealing to a younger adult audience. They are often popular during celebrations like Christmas as a replacement for those who are not drinking alcohol. Schweppes Sparkling Juice Drinks were introduced earlier this year in Grapefruit & Blood Orange, Orange & Cranberry and Lemon & Elderflower. The sales opportunity in premium soft drinks must not be underestimated. Firefly’s newly relaunched range is another to consider. It now features improved recipes of the drinks six flavours: Peach & Green Tea; Lemon, Lime & Ginger; Pomegranate & Elderflower; Kiwi, Lime and Mint; Grapefruit & Passionfruit and Bramley Apple & Ginger.
Spirit of the season
Alcohol obviously plays a massive role at Christmas time in the UK. Sales of PMPs are 8% greater over the Christmas period than any other time in the year so to make the most of this opportunity, retailers should ensure that PMPs are highly visible at all times. Gordon’s and Captain Morgan Spiced PMPs both saw great success when they launched in 2014, and Johnnie Walker Red Label is joining the Diageo PMP range in 70cl and 35cl.
Consider the variety offered within your range too: consumers say they are more likely to buy a cheaper brand for a party, and spend more on a premium brand such as Ciroc for a gift. Diageo research reveals that 73% of shoppers would buy spirits as gifts from convenience stores so prioritise this shopping mission.
Following the successful launch of Maxxium UK’s Know Your Store, the company is providing independent retailers with key information to maximise spirit sales at Christmas.
Having identified the opportunity for retailers to lift spirits sales at this time of year Maxxium is offering some simple steps for retailers to follow (see sidebar).
Maxxium UK outlines some compelling facts to support stocking spirits and encourages retailers to get ready now. Research shows that one-quarter of spirit sales take place in the last 12 weeks of the year and 50% more than average during the week leading up to Christmas.
Continental Wine & Food (CWF) said more experimentation is evident in the wine market. There are very few bottles of wine available for less than £5 so consumers are willing to try something different within their price range. The British wine market is also predicted to grow over the festive season. For example, CWF’s Straw Hat 75cl sales are up 78% year on year and the brand says it anticipates further growth over the next twelve months.
Backing beer
In terms of beer, Craig Clarkson, Category & Trade Marketing Director – Off Trade, Heineken UK, says that over the festive period, shoppers are often looking for items to create an extra special at-home occasion and are therefore more likely to spend that little bit more through either trading up or adding items to their basket. “Last year ‘total alcohol’ was the joint number one performing category over the Christmas period, up £66.6m, demonstrating that the festive season offers retailers the opportunity to maximise alcohol sales,” he says.
It’s also a good time for encouraging shoppers to trade up to more premium brands, considering that 74% of Cider and Beer growth, during the build-up to Christmas last year, came from premium and World beer brands. Another aspect worthy of note is that last Christmas, 80% of cider and beer sales came from smaller packs (single bottles, two, three or four packs), when consumers were topping up on the way home or en-route to visit friends.
AB InBev says retailers should focus on quality of products, rather than quantity for the festive season with shoppers willing to spend more on premium products if they see the value. Stella Artois 4x500ml is currently the biggest Beer and Cider product in the Independent trade during this period and will be running a unique off-trade Christmas gift offering to add further value for consumers. Recent beer launches include Stella Artois Cidre Elderflower and Cidre Peach. Retailers should make sure categories are clearly segmented with relevant signage. It is essential to provide chilled beer and cider products – especially small packs. Small packs are easier to chill, and chilled beer is a key point of difference in convenience outlets. Merchandising fixture by subcategories will allow the shopper to easily find what they are looking for – for instance, grouping similar products such as premium lagers together.
According to Diageo, Craft Beer is still small, accounting for just 2% of total Beer volume, but is growing at 31.6% in volume with +500k new consumers entering it within the past 12 months. Beer still dominates the Total Beverage Alcohol (TBA) Category in terms of size but Spirits has contributed the most growth, adding +£198m to TBA category and accounting for 55% of TBA growth. Over the last three years, consumers have increased their spending in convenience by 13%, topping up their baskets with unplanned, last minute purchases that hold one of the biggest opportunities for retailers to unlock sales.
Pre-mixed cans are popular with consumers who are looking for the ideal sized serve every time. Diageo is looking to grow sales in this category with important brands including Smirnoff, Gordon’s, Captain Morgan and Pimm’s. It is worth noting that 78% of shoppers who buy premix go on to purchase the spirit brand so it encourages shoppers to trial brands and then trade up, providing an opportunity for increased spirts sales.
Christmas will be a busy time for Scottish retailers but with the right merchandising, promotions and range of drinks, profit margins will be sure to rise.
