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How merry will Covid Christmas be for FMCG wholesalers and retailers?

  • SalesOut
  • SalesOut

It’s been a tough year, the toughest ever for many, but it doesn’t look like the Christmas holidays will be providing any of the usual seasonal respite for some.

Where else could we possibly start a Christmas blog than with turkeys? With the Covid restrictions still in place, there is growing concern that the ‘Rule of Six’ will mean many of the birds that are being reared for the big day will be too big for the scaled-down Christmas dinners. This has forced farmers to put their turkeys on diets to bring them to market at a lower weight to cater for smaller gatherings.

Genuine optimism

However, there are some categories that will be looking forward to the festive period with genuine optimism. Since the beginning of 2020, and predominantly since the start of the Covid-19 outbreak, UK Retailer sales are £4.54b higher than last year, driven largely by the Ambient (+£1.4b) and BWS (+£1.8b) departments.

BWS has certainly been the big winner in Supermarkets and Convenience ever since the initial lockdown began in March, which effectively shut down the hospitality sector. With new regional lockdowns now in force and the uncertainty set to continue for some time yet, you could say spirits are likely to be providing the Christmas Spirit for many this year.

Retailers will have learnt from previous seasonal events in 2020 that Christmas is sure to be heavily home-based. That means they will need to ensure they have sufficient stock available to meet the unusually high consumer demand in some of the key categories.

Lessons learned from Mothers’ Day

Mothers’ Day provided a good indicator of what we might expect in the run-up to Christmas. With all the disruption going on at the time, Mothers’ Day 2020 was not a focus for shoppers in the final week, as is usually the case, with declines seen across traditional gifting sectors. In fact, all major gifting and seasonal categories were down during the Mothers’ Day period (chocolates down -£14m and flowers down -£2m), except Wine (up +£6m), which increased in line with the closure of the hospitality sector.

A 23% decline in Easter year-on-year would suggest we are highly likely to see similar outcomes this Christmas, particularly if the lockdowns become more widespread and severe.

Get the beers in

With some outdoor Christmas events already cancelled, such as Winter Wonderland and New Year’s Fireworks, along with limitations on capacities in restaurants and bars, home consumption is likely to benefit from lockdown restrictions, particularly categories like BWS. Retailers need to be prepared to take advantage of this predictable shift in customer behaviour.

It’s hard to know how things are going to pan out in 2021. Even though there’s talk of a vaccine arriving in the Spring, we should all be prepared for seasonal events next year to be affected in the same way as they have been in 2020.

For more detailed information on changing customer behaviour during the Covid crisis and what it means for wholesalers and retailers, please book a OneView Demo.

Published 5 October, 2021

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