Declining Easter sales need to be curbed through innovation

With this weekend’s four-day break almost upon us, retailers and makers of hot cross buns and chocolate eggs are ramping up campaigns and promotional activities to exploit consumers’ extra free time. However, data suggests that sales and interest over the Easter period have softened over the past few years, something that needs to be fixed through creative in-store marketing and product innovation.

With spend over the holiday valued at £500m last year according to Mintel’s UK Seasonal Shopping Report, Easter presents a major opportunity for both brands and retailers, with consumers spending more on the holiday than the likes of Mother’s Day or Valentine’s Day in 2014.

More than two thirds of British consumers spent on Easter-related goods in 2014, with 53% spending on chocolate gifts to produce a total of £250m in confectionary sales.

However, while consumers are certainly still buying and seasonal promotions and products are widespread, the report also suggests interest in the holiday may be declining.

Over one in ten respondents said they are spending less on Easter than a few years ago, while over a third believe Easter is becoming too commercial and 26% believe Easter eggs are not good value for money.

Further, while the Easter period provides an annual boost of around half a billion pounds to the grocers sector (including all bank holiday spending and Easter sales), the 2013 uplift in sector sales between February and March (when Easter fell) was £568m, dropping to £544m in 2014.

This data suggests there is an opportunity for retailers and brands to ramp up spend over the holiday and reignite consumer interest, something they must do by driving in-store traffic, upping product innovation and tapping into trends such as personalisation.

These are the keys to convincing the core young-family demographic to spend more on the holiday as well as bring new customers into the market, such as by encouraging adult-to-adult gifting, according to Mintel.

In-store “theatre” key to driving Easter sales

Neil Mason, head of retail research at Mintel, told Marketing Week that the competition over Easter comes down to in-store competing with online distribution.

“Easter is an opportunity to pour more people into store,” he said. “It’s retail theatre, with stores becoming destinations for people to go to. The more they can theme around different season events, the more it’s an opportunity.”

He said this can be through simple things like in-store egg hunts to give parents more browsing time or throughout “opportunistic sales” such as pop-ups or personalisation on Easter eggs, a theme that is becoming increasingly popular.

“It’s a way of offering something a little bit new and different,” he said.

“Consumers are buying into that at the moment – they want unique and personalised presents.”

Steve Dresser, director of Grocery Insight, told Marketing Week that pushing Sunday Dinner solutions is also important for retailers.

“Sainsbury’s do a great job of linking up events with their food, particularly with Taste the Difference, which benefits from strong marketing in store,” he said.

“We see the same across retail with all retailers preferring to push their premium ranges at this time.”

Focus on own label may not be the answer

Creme_Egg_new_packaging_(Canada)Promotions and discounting are also key to driving sales, not only over the weekend but in the months leading up to it, with 34% of consumers stating they usually buy Easter eggs on promotion.

“Eggs seemingly come in as Christmas ends and then are on sale for three to four months,” said Dresser, adding that many retailers have been focusing on own label chocolate eggs, a strategy that may not be proving successful.

“High volume Eggs, such as Cadbury’s, are typically traded at £1 from early in the season to maximise volume,” he said.

“Sainsbury’s are offering own label Easter Eggs in their assortment too, down to 80p this week with good levels left in store, perhaps showing a lack of appetite for these from customers versus branded equivalents.”

Mason agreed that the demand for branded products seems to be higher than own label despite heavy discounting and promotional activity, such as buy-one-get-one or half price offers.

“My perception is that it would be more of a branded market than an own label market,” he said.

“There’s so much more activity taking place around the Easter seasonal event and as the economy improves, we are seeing peoples’ disposable incomes and wages rising slightly. With this being a very price competitive market, I would imagine some people would be trading up to some of the more premium chocolates.”

Brands like Cadbury are certainly seeing success in the period – according to Tony Bilsborough, head of UK external communications for the brand’s owner Mondelez, Cadbury’s share of the chocolate market shoots from 30% to 50% over the Easter period.

He also claims the brand is the market leader and saw 14.6% growth over Easter last year.

“For us, Easter isn’t simply about Easter eggs, it’s also about brands such as Crème Egg and Mini Egg and other novelties. It’s a huge season for us.”

He added that while it’s too early to predict this year’s sales, early feedback from the trade “looks like we’ll be expecting a really big season”.

Untapped opportunity in seasonal product innovation

Array_of_Hot_Cross_Buns,_March_2010Chocolate innovation has increased globally in the past year according to Mintel, with new product launches growing 18% year on year to 2014.

However, while the majority of this is being driven by Europe, which accounted for 51% of all new chocolate launches last year, it does not appear to be reaching the Easter holiday.

Only 5% of consumers say they welcome new Easter products being launched according to the Mintel report, which Mason says could be because they’re not used to the idea.

“A lot of your chocolate tends to be quite traditional,” he says. “You don’t see that much innovation around Easter eggs, not as much as you would in chocolate bars.”

However, Bilsborough says Cadbury has seen success in some of its Easter innovations, with the launch of its Marvellous Creations Easter egg taking the third place spot in the market last year.

“Traditionally its often the Cadbury Crème Egg Easter egg which is the best seller, but success for us is a combination of tradition and innovation,” he said.

There is room for new product development outside of the chocolate category as well according to Bryan Roberts, insights director for Kantar Retail, who agreed that UK retailers aren’t fully taking advantage of the weekend.

“Easter is obviously a massive trading period for the supermarkets given the surge in demand for eggs and meal/booze supplies for family get-togethers over the long weekend,” he said.

“However, I get the sense that UK retailers might be missing a few tricks in terms of not selling DVD selections and activity packs to occupy kids over the Easter holidays.”

He added that the rest of the continent sees the likes of rabbit-shaped cheese and butter in stores, something that the UK could benefit from.

“UK retailers could be a bit more innovative around their offers instead of merely limited themselves to chocolate eggs and roast dinner,” he said.

Mintel’s report suggests the small percentage of shoppers who are open to new products tend to spend more, and should be a priority for retailers.

Roberts says brands like Asda, who produce bunny-shaped crumpets, and retailers who are producing variations on hot cross buns are examples of those taking steps in the right direction to reach these consumers.

“There has been a degree of innovation that suggests that the UK supermarkets are looking to capitalise more on this opportunity,” he said.

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