Looking Ahead... Webloyalty's Easter Retail Research 2014

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The latest research report from Webloyalty and Conlumino looks at Easter retail trends, and what we are planning for the Easter break. The report also reveals the nation's favourite chocolate Easter egg!


1.LOOKING AHEAD EASTER RETAIL TRENDS WEBLOYALTY & CONLUMINO MARCH 2014 2. Page 2 Introduction 2014 Webloyalty & Conlumino enquiries@webloyalty.co.uk | 020 7291 8720 Looking ahead ... Easter March 2014 Webloyalty 19-21 Great Portland Street W1W 8QB 020 7291 8720 enquiries@webloyalty.co.uk www.webloyalty.co.uk Conlumino 7 Carmelite Street, London EC4Y 0BS 020 7936 6654 hello@conlumino.com www.conlumino.com This research has been commissioned by Webloyalty to provide retailers with insight into the current trading environment as well as some more specic insight around the Easter occasion. About Webloyalty Webloyalty is a leading reward programme provider working with major online retailers to help them build stronger, more protable relationships with their customers. Through our membership programmes, such as Complete Savings and Shopper Discounts & Rewards, we help our online retail partners customers save hundreds of pounds a year while providing the partner with an additional revenue stream. As well as incentivising customers to make repeat purchases at the partners site, they can also earn cashback and get great deals on everything from fashion to electronics to travel at hundreds of top online stores. Webloyalty was established in the UK in 2007 and has since expanded into France, Germany, Spain, Italy, Ireland, Brazil and the Netherlands. About Conlumino Conlumino is a retail research agency and consulting rm. Our work focuses on all aspects of retailing and consumer behaviour, which we deliver through bespoke reports, projects and presentations. We work with many of the worlds leading retailers, property rms and those in the nancial sector to help them maximize success through developing a thorough understanding of the sector and its likely future performance. Foreword 3. Page 3 Introduction 2014 Webloyalty & Conlumino enquiries@webloyalty.co.uk | 020 7291 8720 Looking ahead ... Easter March 2014 Summary The economy GDP growth, falling unemployment and a buoyant housing market point to a burgeoning recovery in the British economy. Although the newfound optimism is to be welcomed, it should be viewed with a note of caution. On the surface the rapidly falling levels of unemployment are a success story, but stagnant wage growth and low productivity levels mean that ination remains high, while there is a danger that the recovery is unbalanced and over-reliant on consumer spending. There are also fears that the governments Help to Buy scheme is leading to unsustainable growth in property prices. Stronger growth in the export market will dampen speculation that the recovery rests on weak foundations. Retail trends Squeezed household budgets have created a tough environment for retailers. Widespread ination in essentials like food and household bills mean that disposable incomes remain low. The by-product of this is a discounting culture with shops competing to oer the best value in the hope of boosting sluggish volumes. Competition in retail is rife and this, along with advances in technology is fuelling a growth in innovation as retailers strive to keep up with changing shopping habits. Whether it be multichannel advances, ever more convenient fullment options or instore technology, retailers across the spectrum are having to re- evaluate their oers to retain relevance and stay one step ahead of the competition. Sentiment While views on the economy have become increasingly positive in recent months, the same cannot be said of consumers views on their own personal nances. Unemployment may be down, but wages are not increasing and ination in the cost of living remains persistently high. Perhaps, even more worringly, there is a wide regional variation in consumer sentiment with much of the optimism about the economy and personal nances being driven by the more auent South. To some extent this bears out fears that the recovery is overly focussed on London to the detriment of other parts of the UK. Consumer data Our consumer survey indicates rising levels of apathy towards Easter, with many viewing the occasion as over- commercialised. In spite of this, the popularity of typical Easter products endures, with hot cross buns and Easter eggs the top products consumers intend to purchase. In the Easter egg market, brands still have the edge, with own-brand eggs facing a challenge to catch up. Reecting the general lack of enthusiasm for Easter, planned activities are decidedly low-key. It may not be party season, but the Easter Sunday meal is still likely to take centre stage, with chicken and lamb heading up many consumers shopping lists. 2014 has arrived with plenty of scope for optimism in the retail sector. On the economic front, housing transactions are up, unemployment is down and a general feeling of optimism is pervading the economy and consumer sentiment that has not been seen since the recession began to bite. With the Easter bank holiday sales period on the horizon, greater momentum in the housing market will be particularly welcome news for home and furniture retailers for whom such periods are critical. Positive movement in the January sales certainly bodes well for more good news over Easter. Looking ahead to Easter 2014 Tough times are still ahead for retailers though. Soaring household bills and sluggish wage growth mean household budgets continue to be squeezed. Retailers are having to work harder to encourage spend resulting in widespread shop price deation, with discounting and promotions rife. Trading in the early stages of last year was hit by unseasonably cold weather, but with the crucial Easter weekend falling a few weeks later this year, in April, and no sign of a cold snap as yet, gardening and outdoor living retailers in particular will be crossing their ngers for a sunny spring ahead. 4. Economic update Current state of retail economy 2014 5. Economic update Page 5 2014 Looking ahead ... Easter March 2014 2014 Webloyalty & Conlumino enquiries@webloyalty.co.uk | 020 7291 8720 The economy and consumer sentiment Auspicious signs Following one of the longest and deepest recessions on record, signs of recovery, however modest, are extremely welcome. Certainly the early stages of 2014 have already shown up some auspicious indicators with falling levels of unemployment, rising GDP and even a long-awaited slowdown in ination. Indeed the Oce for Budget Responsibility (OBR) forecasts GDP growth of 2.4% for 2014, although real GDP is still 2% below its 2008 peak. An unbalanced economy? The UK economy grew by 0.7% in the third quarter of 2013, making it one of the fastest growing of the major world economies. Nevertheless, fears remain that the recovery is an unbalanced one, over-reliant on consumer spending, fuelled by unsustainable house price growth and nanced by a sharp fall in the savings rate. Falling productivity In August 2013, the Bank of Englands Monetary Policy Committee stated that it would not raise interest rates until the unemployment rate fell below 7%. It was assumed that this would not occur until at least 2016, an assumption that was based on the notion that growth would be driven by improving productivity. However, stubbornly high ination and the rapid fall in unemployment, to 7.1% in January this year, suggest that in fact productivity has weakened. It is in part this lack of productivity that explains why the UK has experienced such stagnant growth in real wages, leading to one of the longest declines in living standards in 60 years. Low productivity is especially worrying as it could result in the recovery running out of steam thanks either to a spiralling burden of debt or the BOE being forced to raise interest rates to head o the pressure of ination. The latter in particular would have an immediate dampening eect on retail spending growth. Current account decit worryingly high Further cause for concern comes in the form of the UKs poor performance in the export market. A current account decit of 5% of GDP suggests that import spending greatly exceeds exports; a trend that is both unsustainable in the long term and could lead to the devaluation of the pound. The challenge facing the UK economy lies in rebalancing the recovery away from consumer spending by boosting export growth. There are signs that exports to emerging markets are on the increase though the UK still lags behind many other Western European economies in this regard. Over the next few pages we will take a more in depth look at some of the key issues in the UK economy and consumer sentiment and how they are likely to impact upon retail. Signs of modest recovery but there are likely to be bumps in the road ahead Positive indicators may be masking the true state of the UK economy as fears emerge over an unbalanced recovery 6. Economic update Page 6 2014 Looking ahead ... Easter March 2014 2014 Webloyalty & Conlumino enquiries@webloyalty.co.uk | 020 7291 8720 The economy and consumer sentiment With wage growth remaining stagnant during the recession, rising ination levels have placed a signicant strain on consumer nances. Persistently high ination in the cost of living, particularly in areas such as household utility bills has eroded household budgets to such an extent that retailers are having to discount heavily to stimulate demand. In January the BRC unveiled gures which showed that shop prices had fallen for the ninth consecutive month with the sharpest rate of deation since December 2006. Furniture, clothing and electricals all witnessed signicant price softening while even in the food sector, which has spearheaded retail ination in recent years, the rate of ination slowed down. What does it mean? Stable commodity prices and favourable forecasts going forward are helping retailers to keep prices down, but until the economic recovery lters through fully to the level of consumer nances and the cost of living begins to fall, retailers are likely to have to continue to take a hit on their margins . In the grocery sector falling consumer loyalty and a greater propensity for consumers to shop around in search of the best deal is forcing more established retailers to re-evaluate their proposition in the face of rising competition. Last year Tesco unveiled its vision for the future of big box retail, while Asda will attempt to combat its lack of physical presence in the convenience market with an ambitious strategy to broaden its click & collect oer. As the high street comes under increasing threat from online retailers, Argos is busily undergoing its transformation to a digital retailer, whilst across the board retailers are beeng up their multichannel competencies. Retailers, like Dunelm, are also looking at greater direct sourcing and better space management to boost agging margins. What does it mean? In the context of this squeeze on consumer nances, retailers are nding volume growth to be an elusive commodity. As the ght for consumer spend becomes increasingly hard fought, this in turn is fuelling innovation. Shop price deation as retailers compete to stimulate demand. A competitive market is forcing retailers to innovate. 7. Economic update Page 7 2014 Looking ahead ... Easter March 2014 2014 Webloyalty & Conlumino enquiries@webloyalty.co.uk | 020 7291 8720 The economy and consumer sentiment In comparison with the recent slowdown, the housing market is buoyant: 2013 saw a considerable rise in mortgage transactions in an indication both of strong demand and a willingness of banks to provide nance, while house prices have risen nearly 8%. The strength of the housing market is also its biggest weakness, however, with real fears that rising prices are causing many properties to be unaordable, particularly in regions of persistently high demand such as London and the South East. There are warnings that the price rises are unsustainable with the governments Help to Buy scheme fuelling a housing bubble, while interest from wealthy foreign investors in the London property market may be propping up prices. What does it mean? Greater momentum in the housing market should provide a long-awaited boost for home and furniture retailers that have been particularly hard hit by the recession. While this has inevitably been helpful, the pace of housing growth in many regions remains sluggish by historic standards. In January this year UK unemployment fell to 7.1%, close to the threshold at which the Bank of England has suggested it would raise interest rates. There are concerns though that the manner in which this low rate of unemployment has been achieved owes much to a rise in part-time employment and the popularity of temporary contracts, whilst at the same time there is a generally higher level of job insecurity in the market together with falling productivity. Added to this, the pattern of falling unemployment is far from uniform and pockets of high unemployment are particularly prevalent in the North of England, the inner cities and amongst young people. What does it mean? It may be a exible labour market that has led to the rapid fall in unemployment but jobs are still jobs and higher rates of employment will boost household incomes and improve consumer sentiment. Worryingly low levels of productivity mean that wage growth remains sluggish, however. Housing market momentum, but fears of a house price bubble. A dramatic fall in unemployment, but is that the whole story? 8. Economic update Page 8 2014 Looking ahead ... Easter March 2014 2014 Webloyalty & Conlumino enquiries@webloyalty.co.uk | 020 7291 8720 The economy and consumer sentiment Key economic indicators 2014 compared to 2013 Economic indicators 2013 2014 Gross Domestic Product growth (%) 1.4% 2.4% Since the end of 2012, the economy has shown some signs of life with modest GDP growth and a rise in consumer sentiment. While this appears to be sustainable, and is welcome, the magnitude of the pick-up is shallow. Unemployment (ILO denition Q4%) 7.6% 7.1% Despite pressures on government expenditure having a negative impact on public sector employment, there are signs that, for the time being at least, the private sector is largely picking up the slack. Ination (CPI annual %) 2.6% 2.4% Persistently high ination, particularly for food and energy, which represent such a signicant proportion of overall consumer expenditure, will continue to put household budgets under pressure. Interest rates 0.5% 0.5% With the recovery looking shallow, interest rates are highly likely to remain stable for the foreseeable future. Disposable income -0.2% 0.3% While wage growth continues to pick up, disposable incomes continue to be held back by high ination. 9. Economic update Page 9 2014 Looking ahead ... Easter March 2014 2014 Webloyalty & Conlumino enquiries@webloyalty.co.uk | 020 7291 8720 The economy and consumer sentiment However, views on personal nancial circumstances have not fared quite so well. Notably, in recent months, views on the overall economy have become stronger than views on personal nancial circumstances. This is a reversal of the position we have seen during most of the downturn. There are numerous factors making consumers less certain about their personal nances. Foremost among these is high ination which is squeezing disposable incomes. -32.1 -53.4 -51.3 -48.3 -40.8 -39.2 -37.7 -20.9 -36.9 -37.8 -45.0 -43.9 -43.1 -28.0 -26.0 -28.8 -6.0 -7.3 -9.2 -3.5 -6.3 -2.0 7.1 -14.3 -31.4 -29.3 -30.7 -27.7 -23.3 -25.3 -21.0 -27.9 -28.7 -29.0 -32.0 -29.6 -24.9 -22.0 -24.0 -17.3 -19.5 -19.9 -18.6 -21.0 -18.6 -10.7 -60 -50 -40 -30 -20 -10 0 10 20 Aside from more general economic indicators, one of the most important considerations in terms of the future strength of retail is how the consumer feels. Positively, views on the future of the overall economy have seen some solid improvements over the past few months. This outlook has been fuelled by the more auent regions and higher social classes in particular. Consumer sentiment swings to positive Personal nance continues to be a concern Consumer condence index All gures are an index created by taking those who say things will improve and subtracting those who think things will get worse Index on personal nances: how do you think your own personal nancial circumstances will change over the next 6 months? Index on the general economy: how do you think the economy will change over the next 6 months? 10. Economic update Page 10 2014 Looking ahead ... Easter March 2014 2014 Webloyalty & Conlumino enquiries@webloyalty.co.uk | 020 7291 8720 The economy and consumer sentiment UKs North South divide shows in consumer condence Views by demographics and region While overall consumer sentiment now nds itself in positive territory, it is men as a whole who are driving this consensus with their more positive outlook on the economy. Conversely women, who are traditionally more involved with more non-discretionary purchases, are notably more pessimistic about the economic future. Auent consumers have a much greater positive economic outlook than those people with less. The latter will be experiencing a much tighter squeeze on their disposable income, as their levels of discretionary purchases are expected to rise. There are also strong regional dierences in future economic outlooks. Unsurprisingly, regions associated with tougher macro-economic climates are less optimistic. The South has higher levels of disposable income, and non-discretionary purchases will aect them less, leading to more positive economic projections. Gender Auent and not so auent Region Women -2.5 Men +18.4 DE* -0.8 C1+C2* +10.7 AB* +20.4 +4.0 North West +12.2 London +13.2 South East +11.9 South West -17.2 North East Despite the overall economic outlook being quite positive, the view is not universal. Here we take a closer look at consumer sentiment across a range of demographics. All numbers refer to the overall economic index; the average score for views on the future of the general economy in January. The overall average index for this is +7.1. A High managerial administrative or professional B Intermediate managerial administrative or professional C1 Supervisory clerical and junior managerial administrative and professional C2 Skilled manual workers D Semi and unskilled manual workers E State pensioners, casual or lowest grade workers and unemployed * 11. Economic update Page 11 2014 Looking ahead ... Easter March 2014 2014 Webloyalty & Conlumino enquiries@webloyalty.co.uk | 020 7291 8720 The economy and consumer sentiment One of the factors weighing negatively on consumers minds when it comes to personal nancial circumstances is the prospect of future ination. The large majority of consumers still believe that many, non-discretionary areas of spend (like utility bills and food) will rise sharply in the next six months. This expected rise in essential living costs will inevitably erode disposable income. It is no surprise that consumers views on future personal nances are relatively bleak. Although consumers are less pessimistic about discretionary areas of spend, such as electronic gadgets and homewares, they still believe that these things will be generally inationary. 5.4 Petrol or diesel Food Clothing Electronic gadgets Homewares 54.9 3.1 63.5 5.7 30.9 11.3 25.7 4.7 24.1 Expecting a fall (%) Expecting a rise (%) Household utility bills 2.9 66.4 -49.5 -60.4 -25.2 -14.4 -19.4 Net dierence -63.5 Personal circumstances still weigh negatively on consumers minds The squeeze continues Percentages of consumers expecting a rise and fall in prices across certain products and services over the next six months. 12. Easter A focus on Easter 2014 13. Easter 2014 Page 13 2014 Webloyalty & Conlumino enquiries@webloyalty.co.uk | 020 7291 8720 Looking ahead ... Easter March 2014 Easter trading tips for retailers 1 Multi-buy oers are key Food is central to the Easter festivities and the holiday presents a signicant opportunity for supermarkets. With the grocery sector becoming characterised by falling loyalty in the wake of the recession, one way to boost basket sizes may be to oer multi-buy deals on products featured in traditional Easter recipes such as the meat and vegetables of a traditional Sunday roast. Waitrose has taken this one-step further by oering deals on ingredients featured in recipes from celebrity chef, Heston Blumenthal. Focussing the campaign on a recipe in this way provides consumers with encouragement and guidance to invest in less familiar ingredients. In 2013 the campaign for Hestons Easter roast lamb featuring a recipe inspired by his boyhood memories of holidaying in Provence boosted sales of anchovies by 400%. With more than half of consumers in our survey (52.1%) typically waiting for multi-buy deals before purchasing Easter eggs, combining promotions in this way looks like a recipe for success. 2 Harness social media In recent years supermarkets have been receiving plaudits for the quality and value for money of their own-brand Easter eggs, yet despite rising Easter egg prices, own-brand eggs still lag far behind branded eggs in terms of popularity. Marketing is certainly one area where there is room for improvement. The success of Cadburys Have a Fling with a Creme Egg Facebook campaign shows that perhaps social media may be a good platform to boost consumer awareness of own-brand eggs. The key lies in making the content interactive and engaging, employing a campaign slogan ideally with a hashtag to encourage trending and build momentum around the brand together with a clear narrative to weave the campaign story together. 3 Bring technology into stores Providing instore technology is another way for multichannel retailers to stand out from the crowd. For example, Augmented Reality enables retailers to bring static catalogue and instore imagery to life with the help of smartphone apps and provides a way for customers to gain access to extra content, making the shopping experience more fun and interactive. In 2013 Asda employed this to good eect with an Augmented Reality Easter Egg hunt in over 400 of its stores using the Asda mobile app. 4 Encourage family fun The Easter period is critical for gardening and DIY retailers, yet shopping for DIY products is hardly the most entertaining or glamorous activity. The leisure mix in out of town retail parks has improved markedly in recent years, but retailers could still do more to appeal to families looking to combine shopping for their homes and gardens over the Easter period with a family day out. B&Q for example, has experimented with oering classes aimed at children over the Easter weekend, including one which involved assembling a wooden Easter egg holder. 14. Easter 2014 Page 14 2014 Webloyalty & Conlumino enquiries@webloyalty.co.uk | 020 7291 8720 Looking ahead ... Easter March 2014 Easter trading tips for retailers 5 Keep a handle on your supply chain In such a competitive market place with competing promotions forcing prices down, retailers must do all they can to protect those precious margins. This is particularly the case in sectors such as furniture where the Easter sales period sends rival retailers into a discounting frenzy. Taking control of the manufacturing process is one way to keep supply chain costs down, but not all businesses have the wherewithal to manufacture their own products. This is where direct sourcing comes into its own. Dunelm has already made direct sourcing a major part of its growth strategy to protect its value credentials, while Oak Furniture Land keeps costs down by commissioning its furniture direct from factories in India, China and Vietnam rather than pay inated fees from wholesalers. 6 Plan for unexpected weather The perennial unpredictability of the British weather is making it more and more dicult for retailers to plan and time promotions eectively. Homebase, for example, has introduced a dynamic advertising strategy to rapidly shift the focus of its campaigns according to the weather: focussing on home improvement and DIY during prolonged periods of rain and switching back to outdoor living when the sun begins to shine. Having a predominantly British supplier base has also helps it to rapidly recongure its product selection in changing meteorological conditions. The strategy could equally apply to food retailers switching between comfort food promotions during a cold snap to burgers, sausages, salads and other popular barbecue and picnic items should the sun come out to shine. Flexible stock management could also be the answer for fashion retailers, many of whom were caught out by a lack of interest in their seasonal clothing ranges during last years cold snap. 15. Easter 2014 Page 15 2014 Webloyalty & Conlumino enquiries@webloyalty.co.uk | 020 7291 8720 Looking ahead ... Easter March 2014 Retail sector trends and forecasts Forecast growth of the Easter retail market 2013 2014 Easter spending forecasts Market Dynamics Total Easter market Many retailers are facing an uphill struggle to coax spend out of hard-up consumers. Last year widespread snow and ice made for tough Easter trading conditions and although 2014 has already witnessed record rainfall, the prospects for warmer weather are good. Whilst that bodes well for some, it may impact negatively on others. Home & furnishings, electricals and to an extent DIY retailers are likely to suer a fall in footfall if the sun does come out . That said, a generally improving economy and housing market is likely to elicit increased demand across much of the retail sector, albeit that perhaps now more than ever consumers are prepared to shop around to achieve the best value on oer. 4,220 4,355 Total Easter retail spend (m) 2013 2014 +3.2% 710 720 Easter Gifts (m) 2013 2014 Easter gifts Not only are retailers facing o against the prospect of increasingly limited disposable incomes, but there is a growing apathy towards Easter as an occasion which is impacting upon the gift market. In spite of dramatic price increases in recent years, Easter eggs have largely retained their popularity. In the face of rising demand for chocolate in emerging markets, cocoa prices have leapt up recently and retailers may look to once again pass some of this extra cost on to consumers at Easter. Ination-driven growth in food gifts is likely to be at least partially oset by deation in the non-food sector as retailers look to discount to drive volumes. +1.4% 16. Easter 2014 Page 16 2014 Webloyalty & Conlumino enquiries@webloyalty.co.uk | 020 7291 8720 Looking ahead ... Easter March 2014 Retail sector trends and forecasts Forecast growth of the Easter retail market 2013 2014 Easter spending forecasts Market Dynamics Food & drink A sunny spell over Easter would be particularly welcome for food and grocery retailers as Britons bring out the barbecues. Although there has been some slowdown in food ination in recent months, this has largely been driven by a stabilising in prices for ambient food while fresh food ination continues apace. Despite the promises to source from British farms in the wake of the horsemeat scandal, retailers are increasingly sourcing cheaper Polish and Irish beef which should help to oset rising meat prices. Nevertheless, food & grocery is set for a 4.5% uplift compared to Easter 2013 thanks largely to ination and rising demand for fresh produce in the event of warmer weather. 2,010 2,100 Food & drink (m) 2013 2014 1,500 1,535 Non-food seasonal (m) 2013 2014 Non-food seasonal Greater momentum in the housing market is likely to be of particular benet to DIY and home retailers this Easter. Last year seasonal clothing ranges suered due to the poor weather and barring any repeat of extreme weather conditions, seasonal ranges should put in a stronger performance in Easter 2014. As a result of these factors the non-food seasonal market is anticipated to rise by 2.3% to 1,535m. +4.5% +2.3% 17. Easter 2014 Page 17 2014 Webloyalty & Conlumino enquiries@webloyalty.co.uk | 020 7291 8720 Looking ahead ... Easter March 2014 4,220 4,355 Total Easter retail spend (m) 2013 2014 Easter spending forecasts : 2014 Forecast market size and growth rates +2.4% 710 2,010 1,500 720 2,100 1,535 Gifts Food & grocery Non-food seasonal 2012 2013 +1.4 % +2.3 % +4.5% 316,681 324,126 Total retail spend (m) 2013 2014 +3.2% 18. Easter 2014 Page 18 2014 Webloyalty & Conlumino enquiries@webloyalty.co.uk | 020 7291 8720 Looking ahead ... Easter March 2014 Summary of Easter consumer data Easter unimportant and over-commercialised The economic malaise has led to a growing cynicism around many popular retail occasions and Easter is no exception. 72.8% of consumers feel that Easter has become far too commercial, while for almost half (47.4%) Easter is either not that important or totally unimportant. Early indications are that despite the increase in consumer condence and a seemingly resurgent economy, consumer attitudes to spending at Easter will remain fairly static this year with the vast majority of consumers (79.7%) intending to spend about the same as they did in 2013. The great British Easter Sunday roast The tradition of the Easter Sunday roast appears to be alive and well with a notable segment of consumers. Over a quarter (26.4%) plan to cook a special meal or roast on a Sunday; a trend which looks set to boost sales of chickens and lamb in particular (17.0% of consumers intend to buy a chicken for roasting, while 12.6% are set to buy lamb). Fish has emerged as a popular alternative with 9.0% of consumers, putting it, perhaps surprisingly, ahead of other meats on 4.4%. Enthusiasm for Easter table decorations is low though with just 2.0% of consumers planning to purchase them. A time to tend to the garden The freezing Spring of 2013 proved to be disastrous for the gardening and outdoor living markets and retailers will be praying for more favourable weather conditions this year. Almost a fth (17.8%) of consumers intend to use their time over Easter to do some gardening making it one of the most popular Easter activities. Linked to this, over a tenth (10.3%) of consumers intend to purchase outdoor plants, bulbs and seeds this Easter. The tough trading conditions last year led to many garden centres campaigning to end the Easter Sunday trading restrictions which curtail their sales potential during what is one of the most critical periods in the gardening calendar. Own-brand Easter eggs have some catching up to do Despite almost two thirds (62.5%) of consumers viewing Easter eggs as poor value for money, their popularity endures 42.4% intend to buy chocolate eggs for children, while 34.2% will be buying them for adults. Branded eggs dominate with 58.1% of consumers intending to buy mostly or solely branded Easter eggs. This is despite the fact that the past few years have witnessed some substantial price increases on Easter eggs, while at the same time supermarkets have been commended for the quality and value for money of their eggs. Asda and Tesco in particular have had notable successes in taste tests over the past two Easters. It seems that something may be lacking in the marketing of own-brand Easter eggs as just 33.2% of consumers agreed that own-brand eggs are the equal of branded ones. 19. Easter 2014 Page 19 2014 Webloyalty & Conlumino enquiries@webloyalty.co.uk | 020 7291 8720 Looking ahead ... Easter March 2014 Easter views and spending prospects Consumers show high degree of apathy towards Easter Chart to the left shows the proportion of consumers that hold certain views on the importance of Easter. Chart to the right shows the proportion of consumers that say they will spend more, about the same and less on Easter products in 2014 compared to 2013. 18.7 28.7 31.7 12.3 8.7 Easter is totally unimportant to me Easter is not that important to me Easter matters to me, but its not a big deal Easter is an important occasion for me Easter is a very important occasion for me How important is Easter? (%) How much are you intending to spend this Easter compared to last year? (%) 6.4 6.3 79.7 6.2 1.3 Signicantly less A bit less About the same A bit more Signicantly more 20. Easter 2014 Page 20 2014 Webloyalty & Conlumino enquiries@webloyalty.co.uk | 020 7291 8720 Looking ahead ... Easter March 2014 Easter activities Chart shows the proportion of consumers that plan to undertake various dierent activities over Easter. Bearing in mind the lack of importance that many consumers seem to be attributing to Easter this year, it is perhaps unsurprising that consumers planned activities are decidedly low-key. Relaxing at home is by far the most popular planned activity, while cooking and baking feature prominently. 13.3% of consumers plan to bake cakes, biscuits or cookies over Easter, though cooking and baking are the most gender-skewed of the activities in the survey; more than twice the proportion of female consumers intend to bake (18.1% compared to 7.6% of men) while almost a third of women (32.9%) plan to cook a special meal compared to less than one fth of men (18.6%). What are consumers planning to do this Easter? Figures in all charts are percentages The Easter Sunday meal takes centre stage 2.6 2.8 3.2 3.7 4.8 6.2 8.3 10.6 10.8 11.5 13.3 17.8 18.6 21.8 26.4 44.1 Something else Take a holiday abroad Spend more time at the pub Have a drinks party for family or friends Take a holiday in the UK Go and stay with family Have family to stay over Visit friends Do DIY jobs around the house Attend a church service Bake a cake, biscuits or cookies Do gardening Visit relatives Nothing, do not observe the occasion at all Cook a special meal or a roast on Easter Sunday Relax at home 21. Easter 2014 Page 21 2014 Webloyalty & Conlumino enquiries@webloyalty.co.uk | 020 7291 8720 Looking ahead ... Easter March 2014 Easter purchases Chart shows the proportion of consumers that intend to purchase various dierent products for Easter. Hot cross buns and Easter eggs as the quintessential Easter foods, top the list of products consumers intend to purchase this Easter. Just 1.2% of consumers said that they are intending to purchase barbecues or barbecue equipment. This may be a hangover from the unseasonably cold weather that dampened the Easter festivities in 2013 and is a reection of just how weather-dependent this category can be. As is customary in the UK, any prolonged glimpse of sunshine is likely to see barbecue sales soar. More worringly for DIY retailers will be the relative lack of enthusiasm for DIY products with just 2.8% intending to buy decorating equipment and only 2.3% other DIY products. After disastrous sales gures over Easter 2013, retailers will be hoping that the recent momentum in the housing market will help to precipitate a change in fortunes for 2014. What products will consumers be buying this Easter? Figures in all charts are percentages Traditional Easter gifts show enduring popularity 0.5 0.6 0.7 1.2 1.9 2.0 2.3 2.7 2.8 3.7 3.9 4.4 6.3 9.0 9.5 10.3 11.8 12.6 14.4 17.0 34.2 42.4 44.5 Indoor power tools Garden power tools (including lawnmowers) Indoor hand tools BBQ and BBQ equipment Easter household decorations Easter table decorations Other DIY products Other (non-chocolate) sweets and candy Decorating products (paint, wallpaper, etc.) Non-food Easter gifts Simnel cake Other meat Easter biscuits Fish Other chocolates Outdoor plants, bulbs and seeds Fresh cut owers for indoors Lamb Easter cards Chicken for roasting Chocolate eggs for adults Chocolate eggs for children Hot cross buns 22. Easter 2014 Page 22 2014 Webloyalty & Conlumino enquiries@webloyalty.co.uk | 020 7291 8720 Looking ahead ... Easter March 2014 Consumer attitudes towards Easter All gures are percentages As with a number of other occasions, Easter is being met with growing cynicism, with over two-thirds of respondents believing that the occasion has become too commercial. This cynicism is perhaps a more general reection of religion gradually representing less of an importance among an increasingly secular UK population. Easter is an important time to connect with family and friends 10.8 34.7 35.3 9.6 9.7 Easter is an important celebration for me 8.7 19.4 30.8 21.5 19.5 Easter has a religious signicance for me 10.1 17.8 23.2 18.0 31.0 Easter has become far too commercial these days 37.4 35.4 22.4 3.5 1.3 Easter is a time to splash out on good food and drink 3.5 19.3 42.5 20.4 14.4 Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree All figures are percentages Easter is a good time to catch up on odd jobs about the house 8.9 33.5 42.1 9.7 5.8 3.5 17.1 55.4 16.0 8.1 I tend to leave my Easter shopping until the very last minute Consumer attitudes 23. Easter 2014 Page 23 2014 Webloyalty & Conlumino enquiries@webloyalty.co.uk | 020 7291 8720 Looking ahead ... Easter March 2014 Consumer attitudes towards Easter All gures are percentages Easter eggs are poor value for money 25.6 36.9 25.1 10.5 1.8 Easter eggs are a very important part of Easter 12.2 37.1 32.6 10.6 7.6 I would rather receive a normal chocolate bar than an Easter egg 14.7 20.2 39.3 20.4 5.4 I tend to buy Easter eggs when there are multi-buy deals on 19.5 33.1 29.0 9.3 9.0 Retailer own brand Easter eggs are just as good as branded ones 8.0 25.2 45.0 15.5 6.2 Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Easter eggs are for adults as well as kids 24.2 39.3 26.6 7.1 2.8 24.5 30.8 32.7 8.6 3.4 There is too much pressure on parents to buy Easter eggs for kids Cadburys Creme Eggs should be available all year round, not just at Easter 20.5 23.0 36.8 9.8 9.8 Consumer attitudes All figures are percentages 24. Easter 2014 Page 24 2014 Webloyalty & Conlumino enquiries@webloyalty.co.uk | 020 7291 8720 Looking ahead ... Easter March 2014 Preferred Easter egg brands 1st choice Lindt 13.7 Thorntons 12.4 Creme Egg (Full-size Easter Egg) 8.7 Green & Blacks 7.3 Ferrero Rocher 6.5 Dairy Milk 6.5 Mini Eggs (full size Easter egg) 4.6 Maltesers 4.3 Flake 3.6 Buttons 3.3 2nd choice Thorntons 11.2 Lindt 7.4 Ferrero Rocher 6.6 Dairy Milk 6.1 Creme Egg (Full-size Easter Egg) 6.1 Maltesers 5.4 Flake 5.3 Mini Eggs (full size Easter egg) 5.2 Green & Blacks 5.1 Cadbury's Caramel 3.9 3rd choice Thorntons 7.5 Lindt 6.4 Ferrero Rocher 6.0 Creme Egg (Full-size Easter Egg) 5.9 Flake 5.8 Dairy Milk 5.8 Mini Eggs (full size Easter egg) 4.6 Maltesers 4.3 Cadbury's Caramel 4.1 Green & Blacks 4.1 Thorntons were the most popular brand of Easter egg in our survey, with almost one third (31.1%) of consumers naming them as one of the top three Easter eggs they would like to receive. Perhaps the key tenet of CEO, Jonathan Harts turnaround strategy for Thorntons has been to boost the companys commercial arm by focussing more on selling to other retailers where margins are slimmer, but there is potential for a much a greater volume of sales . So far the plan seems to be working with Thorntons primed for renewed growth and it certainly looks as though the brand has been boosted by greater visibility on supermarket shelves. Cadburys Creme Egg are a notable recent marketing success story. 2013 saw the brand ignite a reversal in fortunes following several years of declining sales thanks, in part, to a successful social media oensive. The campaign which invited consumers to Have a ing with a Creme Egg was targeted at the key 16-24 age group that are perceived as being harder to reach with standard TV advertising. Encouraging consumers to interact and engage with the brand played its part in a signicant sales uplift in 2013 and this year over a fth of consumers (20.7%) mentioned Creme Eggs as one of their top three most wanted brands. Mentions in top 3 Thorntons 31.1 Lindt 27.6 Creme Egg (Full-size Easter Egg) 20.7 Ferrero Rocher 19.1 Dairy Milk 18.4 Green & Blacks 16.4 Flake 14.8 Mini Eggs (full size Easter egg) 14.3 Maltesers 14.0 Cadbury's Caramel 11.2 Consumers were asked to select their top three from a selection of Easter egg brands, grading them as rst second or third choice. The tables above show the top ten brands selected as rst, second and third as well as a combined table which ranks the brands by overall number of mentions in consumers top three choices. Easter Egg purchasing All figures are percentages 25. Easter 2014 Page 25 2014 Webloyalty & Conlumino enquiries@webloyalty.co.uk | 020 7291 8720 Looking ahead ... Easter March 2014 Easter Egg purchasing Branded Easter eggs dominate 20.7 31.3 22.4 8.3 7.6 9.5 1 to 2 3 to 4 5 to 6 7 to 8 9 to 10 More than 10 Chart to the left shows the proportion of consumers that intend to buy certain quantities of Easter eggs. Chart to the right shows the proportion of consumers that intend to buy branded or unbranded Easter eggs. 5.0 7.7 29.2 34.9 23.2 I will only buy retailer own brand Easter eggs I will mostly buy retailer own brand Easter eggs I will equally buy retailer own brand and branded Easter eggs I will mostly buy branded Easter eggs I will only buy branded Easter eggs How many Easter eggs are consumers intending to buy? (%) Branded or unbranded? (%) 26. Methodology About the research 27. Methodology Page 27 2014 Webloyalty & Conlumino enquiries@webloyalty.co.uk | 020 7291 8720 Looking ahead ... Easter March 2014 Methodologies and sources A combination of consumer research, secondary research and market forecasting were used to compile this report. Consumer research in this report is based on a survey conducted with a UK nationally representative poll of consumers. Over 2,000 consumers were interviewed during early February 2014 and questioned about their views on Easter and their likely shopping behaviour over that period. All numbers relating to expenditure and forecast expenditure of gadgets are taken from Conluminos own retail model. This is updated on an ongoing basis with inputs from ocial sources (such as the BRC and ONS), retailers results and trading updates, other secondary sources and industry surveys, Conluminos ongoing programme of research into consumer spending and habits, and underlying economic drivers and trends. Conlumino analysts both model and interpret this information to provide guidance on the likely future direction of retail expenditure at an overall, sector and category level. Unless otherwise stated, all sources of information are derived from Conluminos own research and should be referenced to Webloyalty/ Conlumino. 28. Conlumino 020 7936 6654 hello@conlumino.com 7 Carmelite Street, London EC4Y 0BS Webloyalty 020 7291 8720 enquiries@webloyalty.co.uk 19-21 Great Portland Street, London


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