Table of Contents
Issues in the Market
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- Main themes:
- Definition
- Abbreviations
Insights and Opportunities
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- Dreaming of a green Christmas
- Strategic promotions not panic days
- Secret sales need to be controlled to be effective
- Thank goodness for eBay, but charities can help themselves
Market in Brief
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- Pundits puzzled for the second year running
- Another late show
- Consumer confidence unshaken by pre-Christmas interest rate rises…
- …but post-Christmas spending hangover could linger longer
- Which retail categories drove retail sales growth?
- Which retailers did best?
- Which types of gifts were popular?
- The future is online
- Christmas future looks greener
Fast Forward Trends
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- Trend 1: Hits and Niches
- Trend 2: French Trotters
- Trend 3: I-Creative
Internal Market Environment
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- Shift to online gift shopping
- Online: obstacles and opportunities
- Last-minute in-store shopping on the increase
- Promotions start early and run and run
- Secret sales and Internet vouchers
- Trading hours issues
- Farepak failure cast a blight on Christmas
- Stateside attraction
Broader Market Environment
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- Consumer confidence shaken but not undermined
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- Figure 1: PDI and consumer expenditure, at current and constant 2001 prices, 2001-11
- Population changes pose contrasting challenges
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- Figure 2: UK population, by age band, 2001-11
- Lifestyle trends favourable for consumerism
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- Figure 3: UK population, by socio-economic group, 2001-11
- Online shopping growing in technological lifestyles
- Anticipation of a backlash
Market in Context
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- Key points:
- December’s high contribution to retail sales mix
- Mixed goods retailers and clothing retailers most exposed to December trading
- Online altering sales patterns for the non-store category
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- Figure 4: Seasonal analysis of retail sales value – proportion of sales taken in December, by sector, 1995-2006
- Figure 5: Seasonal analysis of retail sales value – proportion of sales taken in December, by sector, 1995-2006
- Fourth-quarter share also disproportionate
- Food retailers increasing share in fourth quarter
- Significant increase in fourth-quarter sales for non-store retailers
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- Figure 6: Seasonal analysis of retail sales value – proportion of sales taken in fourth quarter, by sector, 1995-2006
- Figure 7: Seasonal analysis of retail sales value – proportion of sales taken in fourth quarter, by sector, 1995-2006
Strengths and Weaknesses in the Market
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- Strengths
- Quality counts
- Online and multichannel offers made retailers more attractive
- Online boosted store-based retailers
- Strong demand for games even though new consoles delayed or in short supply
- Other technology products also in demand
- Weaknesses
- Interest rate rises created an element of caution among some consumers
- Future rises likely to dampen consumer spending in 2007
- Price deflation helping a few, but hurting many more
- CDs and DVDs – an important gift category but suffering from weak demand
- Jewellery – another important gift category in the doldrums
Who’s Innovating?
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- Boots crosses the watershed
- Tesco leverages Clubcard data to buy market share
- Movie download services spell trouble for DVD retailers
- Stocking fellas
- Only 365 days to shop for Christmas
- Wider availability of ever-popular gift vouchers
Review of Christmas Trading 2006
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- Key points:
- Doomsayers won the pre-Christmas headlines
- Most analysts’ pre-Christmas forecasts were pessimistic
- Even retailers were taken by surprise by strength of last-minute rush
- Litmus test should be confined to retailers that are trading well
- What actually happened was…
- Worst Christmas ever for punditry?
- Food retailers did very well
- Clothing stores lifted the non-food category
- Household goods stores performed worst in non-foods
- Online retailers lifted home shopping
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- Figure 8: December, year-on-year change in sales value, by sector, 2003/04-2005/06
- December lifted the fourth quarter
- December uplift higher than fourth-quarter uplift in most categories
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- Figure 9: Fourth-quarter year-on-year change in sales value, by sector, 2003/04-2005/06
- Annual out-turn well ahead of 2005
- December relieves the gloom in two poor years
- Deflation causing problems for retailers
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- Figure 10: All retail sales, at current and constant prices, 2000-06
- Food retailers winning at the expense of all other categories
- Grocers’ sales of non-foods contributing to non-food underperformance
- Strong online sales insufficient to counter overall weakness in home shopping
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- Figure 11: Annual change in sales value, by sector, 2003/04-2005/06
Christmas Spending Patterns
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- Key findings:
- Intentions to spend no more than last year did not hold
- Polarity in spending behaviour
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- Figure 12: Perceptions of spending compared to last year, pre and post-Christmas, October 2006 and January 2007
- Who spent more than planned?
- Parents with young children can’t resist spending
- Financial freedom to overspend not confined to ABs
- Misplaced optimism among younger adults
- Year-on-year trend confirms positive trends
- Who spent what?
- More very high spenders and fewer very low spenders lifted overall spend
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- Figure 13: Amount spent at Christmas on gifts for close friends and family, January 2006 and January 2007
- Average spend trends
- Average spend higher than pre-Christmas intentions
- Pre-Christmas pessimism overstated
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- Figure 14: Comparison of those intending to spend more with those that actually spent more, pre and post-Christmas, by amount spent, October 2006 and January 2007
- Who are the lowest spenders and who spent more than planned?
- General trend shows shift to higher than anticipated spend
- Less affluent spend less but 20% of ABC1s spend under £100 at Christmas
- Who are the highest spenders and who spent more than planned?
- Very high levels of spend biased to those in families
- More families and the retired spent at the highest level than intended to
- Which were the most popular gifts?
- Clothing retains most popular gift status
- Electricals and food and drink were bought by more than initially intended
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- Figure 15: Comparison of purchasing intentions with items actually bought this Christmas, October 2006 and January 2007
- Clothing
- Books
- Music and DVDs
- Perfume/aftershave and toiletries
- Toys and games
- Food and drink as gifts
- Jewellery
- Electrical goods
- Household goods
- Gift vouchers
- Video games
- Charitable gifts attract significant interest from those in affluent groups
Christmas Spending Patterns – Detailed Consumer Demographics
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- Figure 16: Items bought as Christmas gifts, by gender, age, socio-economic group, region, presence of children, lifestage, Mintel’s Special Groups and supermarket usage, January 2007
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- Figure 17: Items bought as Christmas gifts, by gender, age, socio-economic group, region, presence of children, lifestage, Mintel’s Special Groups and supermarket usage, January 2007
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- Figure 18: Items bought as Christmas gifts, by gender, age, socio-economic group, region, presence of children, lifestage, Mintel’s Special Groups and supermarket usage, January 2007
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- Figure 19: Comparison of those intending to spend more with those that actually spent more, pre and post-Christmas, by gender, age, socio-economic group, region, presence of children, lifestage, Mintel’s Special Groups and supermarket usage, October 2006 and January 2007
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- Figure 20: Amount spent on Christmas compared to previous year, by gender, age, socio-economic group, region, presence of children, lifestage, Mintel’s Special Groups and supermarket usage, January 2007
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- Figure 21: Amount spent on gifts for close family and friends, by gender, age, socio-economic group, region, presence of children, lifestage, Mintel’s Special Groups and supermarket usage, January 2007
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- Figure 22: Comparison of those intending to spend more with those that actually spent more, pre and post-Christmas, by amount spent, by gender, age, socio-economic group, region, presence of children, lifestage, Mintel’s Special Groups and supermarket usage, October 2006 and January 2007
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- Figure 23: Comparison of those intending to spend more with those that actually spent more, pre and post-Christmas, by amount spent, by gender, age, socio-economic group, region, presence of children, lifestage, Mintel’s Special Groups and supermarket usage, October 2006 and January 2007
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- Figure 24: Average amount spent on Christmas gifts for close family and friends, by gender, age, socio-economic group, presence of children, lifestage and Mintel’s Special Groups, January 2007
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Christmas Shopping Attitudes and Behaviour
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- Key findings:
- Timing and responsiveness to promotions
- Promotional activity attracted high levels of interest
- Planners and accumulators in the ascendancy…
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- Figure 25: Shopping behaviour at Christmas, January 2007
- …but last-minute rush even more significant than last year
- Who are the potential givers?
- Who spreads their spend and who accumulates gifts?
- Who drives the last-minute rush and who are the bargain hunters?
- Discount days do not attract most affluent shoppers
- Enjoyment of shopping, paying for Christmas and the sales
- More think it’s a chore than enjoy it
- Let the good times roll
- Those in dire straits and borrowing unchanged year on year
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- Figure 26: Enjoyment and paying for Christmas, January 2007
- The lure of the sales no stronger this year than last
- Who hates it?
- Who loves it?
- Enjoy now pay later
- Who’s borrowing?
- Who’s waiting for the sales?
- How do spending levels affect attitudes?
- Higher spenders more likely to start early and buy on promotion
- Some lower spenders leave it late…
- …but some start early to spread the cost and buy on promotion
- Consumer typologies
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- Figure 27: Christmas shopper typologies, January 2007
- Group 1: Bore Chore (36%) – an opportunity to excite and inspire
- Group 2: Excited but Unprepared (17%)
- Group 3: Well-prepared (28%)
- Group 4: Unseasonal Buyers (19%)
Christmas Shopping Attitudes and Behaviour – Detailed Consumer Demographics
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- Figure 28: Attitudes towards Christmas shopping and behaviour, by gender, age, socio-economic group, region, presence of children, lifestage, Mintel’s Special Groups and supermarket usage, January 2007
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- Figure 29: Attitudes towards Christmas shopping and behaviour, by gender, age, socio-economic group, region, presence of children, lifestage, Mintel’s Special Groups and supermarket usage, January 2007
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- Figure 30: Christmas shopping behaviour, by gender, age, socio-economic group, region, presence of children, lifestage, Mintel’s Special Groups and supermarket usage, January 2007
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- Figure 31: Christmas shopping behaviour, by gender, age, socio-economic group, region, presence of children, lifestage, Mintel’s Special Groups and supermarket usage, January 2007
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- Figure 32: Agreement with statements relating to Christmas shopping, by average amount spent, January 2007
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- Figure 33: Christmas shopper typologies, by gender, age, socio-economic group, region, presence of children, lifestage, Mintel’s Special Groups and supermarket usage, January 2007
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- Figure 34: Christmas shopper typologies, by amount spent relative to last year and use of the Internet, January 2007
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Impact of Online on Christmas Shopping Behaviour
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- Key findings:
- Biggest online Christmas ever!
- Trend to online continues
- Ideas and price comparison equally important as buying
- Positive experience enjoyed by those using
- Multichannel influence is widespread
- No increase in proportion using online grocery but volume up considerably
- 2007 will be biggest online Christmas ever!
- How many used online and what did they use it for?
- Online gift buying is complementary to buying from stores
- Usage up on last year
- Online a source of ideas
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- Figure 35: Use of and attitudes towards online shopping, January 2007
- Online price validation
- Printed catalogues a key influence
- High levels of satisfaction with online gift shopping
- Delivery a weakness
- Grocery shopping providers need to raise standards
- Auction sites attracting use before and after Christmas
- Use of Internet vouchers a factor this Christmas
- Who used online this Christmas?
- 58% of online users bought gifts online this Christmas
- Usage highest among younger adults, families and more affluent people
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- Figure 36: Usage of the Internet for Christmas shopping, by age, January 2007
- Printed catalogues used extensively by Internet users and those with children
- More men than women search for ideas and price comparisons
- How do spending levels affect use of online?
- Internet attracting spend from high spenders
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- Figure 37: Usage of the Internet for Christmas shopping, by amount spent on Christmas gifts, January 2007
- Printed catalogues also popular among high spenders
Impact of Online on Christmas Shopping Behaviour – Detailed Consumer Demographics
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- Figure 38: Christmas shopping and the Internet, by gender, age, socio-economic group, region, presence of children, lifestage, Mintel’s Special Groups and supermarket usage, January 2007
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- Figure 39: Christmas shopping and the Internet, by gender, age, socio-economic group, region, presence of children, lifestage, Mintel’s Special Groups and supermarket usage, January 2007
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- Figure 40: Agreement with statements relating to Christmas shopping, by average amount spent, January 2007
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Retail Competitor Analysis
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- Key points:
- Predominantly food retailers – includes all food, drink and tobacco specialists
- Category was successful and leading grocers did very well
- Predominantly non-food retailers
- Very inconsistent performance
- Mixed goods – non-specialised non-food stores
- Marks sparkled but John Lewis outshone them all
- Clothing and footwear stores
- Resurgent Marks affected many clothing specialists
- Household goods stores
- Strong performance from Comet but many struggled
- All other non-food specialists
- Most types of specialists underperformed against the overall trend
- Booksellers and stationers
- Health and beauty
- Garden centres
- Jewellers
- Sports and leisure
- Toys and games
- Others specialists
- Non-store retailing
- Online the outright winner
- Online grocery
- All other categories
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