The depot is looking immaculate this morning.
Sunday was busy and seasonal products are at last beginning to move but why do independents leave it so late? Our delivered business volumes are ahead of last year and a stroll past the cages awaiting delivery to retailers was reassuring. Experience tells us not to be nervous so early on there will be plenty of trading between now and the New Year.
Two tins of Quality Street or Roses Chocolates for a tenner looked like the buy of the season at Sainsbury’s until they replaced it with a pound;4 single tin deal. Sometimes it doesn’t pay to buy early for Christmas!
Meanwhile, better than half price wine and champagne deals from the multiples, combined with a massive increase in availability of duty fraud stock into the independent sector, have decimated our wine sales throughout November. Even allowing for the closure of hundreds of Thirst Quench retail outlets, many in locations close to our licenced customers, prospects remain bleak for Christmas.
Elsewhere, the Co-op has joined the Christmas price war by cutting up to pound;200m off prices this month and tripled its divi on selected products.
January’s VAT increase means a lot of work for our retail club members so we have a new retail price file for them.
Price marked packs that carry VAT, particularly cigarettes and confectionery, present the biggest issue and it looks like retailers will have to take the loss of margin on the chin rather than upset customers at the till.
The marketing guys at Kimberly-Clark are on a roll! On the launch of Andrex Shea Butter early this year they claimed to be “breaking the boundaries of the category, challenging concepts, representing innovative, big brand behaviour and helping the brand to stand out despite the current economic climate” (take a breath). Their latest “boundary breaking innovative example of big brand behaviour” is the seasonal introduction of Andrex toilet rolls carrying Christmas designs. Even a puppy could work that one out.
Unilever’s announcement to rationalise their product ranges last month was warmly received by our buyers. Other major suppliers should take a leaf out of their book and do the same. Unilever can be assured of our full support, helping us to reduce our stock holding and free up space for other categories.
It’s not just TV companies and magazines who are struggling for advertising revenue.
Suppliers are reviewing their investment in our sector but our marketing and product promotion programmes are dependent on their backing. Our buyers are increasingly concerned about maintaining an effective and balanced programme for 2010. We must avoid accepting deals on secondary and tertiary lines for the sake of achieving income targets.
I may have been premature in suggesting that office and works parties would be cancelled this Christmas because of the recession. Lastminute.com says recent research shows there has been a significant rise in Christmas party bookings and that up to 40% of the country’s work force will have something to look forward to, even if they have to contribute towards it themselves. We need some of that business to come our way.
Goods-in are reporting an increasing number of short deliveries. This is putting a lot of pressure on the buyers who must chase up outstanding orders or find alternative supplies. The thing we hate most of all is being let down by suppliers and going out of stock.
Someone should tell Lidl that if they don’t want to annoy their customers and lose Features > Business, the least they can do is be in stock of products they are promoting, particularly on the first day.
Unlike most stores, they announce their special offers at least a week in advance so it shouldn’t be too difficult for them to get some stock onto the shelf.
The recession is being blamed for a relatively static energy drinks market. As one expert claimed, declining sales growth is a sign of a maturing market, but this category is more congested than the M25 on a Friday night. It is grossly over-supplied with too many brands, too many promotions and to make things worse, a plethora of shots has arrived on the scene. Own labels have not helped either. There is, however, still plenty of profit to be made from the category. We just need to focus on the few.
The FWD Gold Medal Awards in London was a great night out not just an opportunity to reveal and reward excellence in our industry but to enjoy some good banter with our competitors and leading suppliers.
Now back to the battle.
Look back at the highlights of the past year the demise of Woolies, the revival of Cadbury’s Wispa, Oxo with the Xfactor, Cajun Squirrel flavoured crisps (did someone make that up?), the chewing gum wars, Benson amp; Hedges Rolling Tobacco, the launch of Rowntree’s Randoms, retro-packaged Wagon Wheels and the First Quench collapse just a few events drawn from my diary. Could we have predicted them, or their impact on trade?
We will have the World Cup in South Africa, a General Election and the relaxation of product placement rules on TV to influence business in 2010. Lots of new products, too, we hope we love them maybe even a long overdue launch of the Hershey bar from a newly merged Cadbury/Hershey corporation! Naturally we also want to see an increase in consumer confidence as we (hopefully) come out of recession.