Christmas, or the “key festive trading quarter” (as it is hailed in retail), is tinkling towards us. This year it is flanked on one side by the FIFA World Cup, charging at the wide-open goal of greater profits; on the other side, it is in danger of being tackled by a developing cost-of-living crisis and fuel shortage that threatens to make shoppers super-glue their wallets shut.
To start with the problems and opportunities presented by having the 2022 FIFA World Cup so close to the Christmas holidays.
The World Cup, which was postponed to the winter to avoid Qatar’s intense summer temperatures, has completely derailed the algorithms retail chiefs are increasingly using to predict trade and plan their logistics. But is this really a disaster in the making?
Santa shoots, Santa scores
Reports are abounding that the Winter World Cup (as opposed to the Desert World Cup, perhaps more apt) has added a new level of uncertainty to UK Christmas grocery sales. Reuters, for example, reported recently that questions are being raised about how to persuade shoppers to buy Christmas goodies such as luxury biscuits at the same time as beer and pizza – or perhaps to figure out how to get cash-strapped consumers to spend once during the World Cup tournament and then spend again a few weeks later over the Christmas period: “This is a bit of a curveball in terms of how to plan for Christmas and a World Cup at the same time,” Ken Murphy, chief executive of Tesco told reporters last month.
It is true that the football tournament in Qatar, taking place between November 20 and December 18, falls slap bang in the important festive “commercial district” where the highly competitive sector normally generates a large part of its annual profit.
Similarly, World Cups, which traditionally take place in the northern hemisphere during the summer, tend to give UK supermarkets a big boost as households stock up on beer, wine and spirits, grills and snacks and host large gatherings. (But few BBQs in December.)
Photo: iStock
As Murphy hinted, buyer confidence was at record lows even before the government’s new economic plan, now reversed, sent mortgage rates soaring and sparked fears that a sharp fall in house prices could worsen the cost-of-living crisis.
Many think this means that the combined consumer indulgence in November-December is likely to be less than if the two main events were further apart.
But as we can gather from Barclaycard’s observations, the fact is that families take Christmas very seriously and have already begun squirrelling away funds to celebrate the holiday. If anything, the cost-of-living crisis has probably focussed minds more intensely on making sure there is enough to spend on having a good time over the winter equinox.
The FIFA World Cup should probably then be seen as an adjunct to Christmas sales rather than a Grinch-like thief – mums will not allow dads to blow the budget on beer, leaving the kids without selection boxes and plenty of pop.
In addition, there are other factors that suggest Christmas will survive the soccer competition:
Shoppers are cutting down on dining out, suggesting they are planning to celebrate at home. Even if total consumer spending shrinks, it’s a greater proportion of remaining cash will go on goods purchased in c-stores.
Supermarkets are particularly anxious over lost sales, and this might be due not to no sales but more local sales: part of cutting down on expenses is not loading the car up so much, and consumers staying local may well favour local shops.
Many Christmas-related purchases are impulse and self-treating buys. That is why companies such as Mondelēz suggest stocking Christmas-related chocs and sweets even from September, as people anticipate the holidays and start early on to buy seasonal confectionery, for example.
Consumers will also buy the same chocs more than once – a tin of sweets for Christmas in October that will inevitably have disappeared by November and be bought a second time in December.
Apart from that, it is probable that sceptics are underweighting the public’s desire to cheer themselves up on the cheap, for which the double-header of footie and festive cheer is the perfect answer.
So, instead of thinking either/or for Christmas and the World Cup, hedge bets by promoting both in store, and try to make enthusiasm for one feed the other.
As Murphy pointed out, Tesco is planning special signage in stores to draw customers’ attention to football celebration products and offers. This will be separate from the dedicated Christmas products section.
Keep your sleigh full
The opportunities for local independent retailers multiply as Christmas comes closer.
Already we are hearing about how grocery delivery or collection slots for the festive season are likely to all be booked up well ahead of the festive season. When the ongoing supply chain difficulties are also taken into consideration, the number of distress and impulse purchases from disappointed supermarket customers will doubtless be high. Popping out to the local store – there to discover the unobtainable apple sauce or Christmas crackers and wrapping paper long sold-out at Sainsbury or Tesco – will inscribe the convenience channel in shoppers’ memories as the benevolent saviour of the season.
Research by Retail Economics on how retail sales will fare this Christmas showed that retail sales by volume will be down year on year in the final quarter of 2022. However, high inflation currently the value of sales is predicted to rise. The Superdrug chain has just announced a 219 per cent sales uplift of Christmas-related skus compared to this time last year – and November is only just beginning.
In other words opportunity for profit remains, but make sure you are stocked up, and also merchandised in the most enticing manner.
The complexion of gifting is likely to change this year as the cost-of-living increases really bit. Recent research discovered that as many as 46 per cent of UK consumers think they will spend less on traditional presents this year, especially luxury brands, as funds are diverted to essentials.
However, this could prove advantageous for the C-channel as the range of Christmas items traditionally stocked by independent retailers, such as drinks, snacks, chocolates and alcohol, are substituted as gifts.
Do not neglect ordinary groceries when it comes to merchandising for Christmas. Many everyday items take on a special significance at Christmas and oversell during the festive season.
Think about nut & dried fruit displays including shelled and un-shelled nuts, raisins, candied and glacé fruit chinks and pieces, dates (especially Medjool dates), Chestnuts, and pistachio and peanut packs. Shoppers buy all these in greater quantities in the lead-up to Christmas
Likewise fruit baskets, exotic fruits and traditional treats that sit in Christmas stockings – such as easy-peeler mandarins (one of the great, evocative smells of Christmas) should be placed front and centre as a “cornucopia cue”.
Photo: iStock
Stuffing, sauces and helpful convenience packs of vegetables can attract harassed cooks looking to cater for large families, so don’t think beans and brussels sprouts are unglamourous – on the contrary, they are the essence of Christmas just as much as Toblerone and Quality Street!
Cored Pineapples, Cubed Butternut, Microwave Green Beans, Pomegranate Arils, cut vegetable bags, Vegetable Spiral Noodles and pre-ordered fresh cut fruits and vegetables will sell well all month, especially right before Christmas and New Year’s Day. Are you prepared to have these incremental sellers in stock? Don’t forget the Fresh Salsa!
This potential success will be determined by availability and visibility – so turning the store into Santa’s grotto will help send the message that everything needed for merry Christmas can be found without having to travel very far (and waste precious gasoline!).
Last year, according to Nisa, almost a quarter of shoppers planned to spend a bit more on food and drink this year to ensure that Christmas Day, Boxing Day and even New Year’s Eve were extra special. That was after the pandemic restrictions were (almost) lifted. This year, free of all restrictions, but restrained by inflation, the home fires with friends and family are looking more welcoming than ever.
So, remember: Don’t delay – It's Christmas today – at least in terms of stocking up, as customers start their seasonal spending from September onward and are now going full steam for Santa.
Following the initial response condemning the Budget as 'the most damaging for independent retailers in recent memory' from the British Independent Retailers Association (Bira), members have shared their stark reactions to the triple burden of doubled business rates, increased National Insurance, and higher minimum wage costs.
Multiple retailers have calculated specific impacts on their businesses, with costs ranging from £90,000 to £150,000 per year.
"This budget was horrendous for us as a company. Estimated costs to be around £110,000 - £120,000 per year," said Andrew Massey of Masseys DIY in Swadlincote, Derbyshire.
The immediate impact on employment is already evident. Peter Massey of R Massey & Son Ltd, employing 38 staff, said: "We decided last night that we will not replace the next two members of staff that leave. We are also considering what to do with our coffee shop that employs quite a few youngsters."
Kevin Arthur of Pewsey RadioVision in Wiltshire highlighted the broader staffing implications: "The minimum wage rising to £25.5k per year (40hr week) is scandalous. Having to pay this type of salary for your most basic of employees will mean less employees, resentment amongst 'more valuable' staff who believe they are 'worth' far more than a basic employee, and less ability to pay staff bonuses. I am now looking to reduce staff hours, reduce staff numbers, and Christmas bonuses will be curtailed and any other 'perks' reduced."
A store owner in the South West, whose business has traded for over a century, revealed: "Prior to the budget we were looking at taking on a new store and creating 12 new jobs. The colossal impact that Labour has imposed on our business means that not only will this new store not happen, but we will be reviewing our sites and having to make redundancies in order to survive."
William Coe, of Coes in Ipswich, highlighted the challenge facing customer-focused businesses: "We all want the same thing – Growth – however for growth businesses need to make a profit to enable them to invest. With the cost rises put upon them yesterday this gets harder and harder especially for the retail and leisure sectors where the ability to make savings through technology is limited."
John Jones, Managing Partner of Philip Morris Direct in Hereford, warned: "We've been saying for months that the issue for small business is the cumulative effect of so many extra costs. These add up to a level of costs that just aren't sustainable, and I fear there will be a blood bath of small business on the high street."
The impact threatens the very existence of some long-established businesses.
A West Midlands clothing retailer with over 100 years of trading history confirmed they are "closing the doors in the near future," adding that "the cumulative effect of the rate hike, NI increase and the Minimum Living Wage increases mean that already emptying towns will become wastelands."
For smaller independents, the situation is particularly acute. Tracey Clark of Albert's Hardware in Somerset revealed: "I work in excess of 70 hrs a week with little to no personal financial gain. I can't see myself surviving the next six months."
The disparity between high street retailers and online competition was highlighted by several members, with concerns raised about UK-based businesses bearing the cost burden while international competitors selling cheap imported clothing operate with minimal tax liability.
A Greater Manchester fashion retailer emphasised the disconnect between policy makers and small business reality: "They are completely detached from reality. They need someone advising that has lived and breathed a small business. There should at least have been a threshold where businesses below a certain turnover aren't hit by these things."
The impact extends beyond retail to related sectors.
A West Midlands builders' merchant warned of broader economic consequences. The owner said: "The Government has put the boot in to small business. We are paying for everything. Farmers are in real trouble now and the economy will suffer. They went round telling businesses rates were unfair and would sort it out, then just put them up. They lied to us all and now jobs will go and inflation will rise."
Many retailers expressed frustration at what they see as broken promises. A Birmingham-based jewellery store owner said: "High Streets are the cash cow for Governments and when most have disappeared, they will scratch their heads and wonder why."
The combined impact of these measures threatens not just individual businesses but entire local economies. With many retailers already reporting worse trading conditions - Bira's recent survey showed 46% reported worse trading in early 2024 compared to 2023 - these additional costs could prove the final straw for many independent businesses.
Andrew Goodacre, CEO of Bira said: "For some, the Budget has forced immediate operational decisions. Several retailers mentioned reviewing staffing levels, reconsidering expansion plans, and in some cases, accelerating closure plans. The impact on future generations is particularly concerning, with multiple family businesses questioning their long-term viability."
A Midlands hardware store owner summed up the common challenge: "This will make trading near impossible with wage increases and the business rates, and no one wants to pay any more for goods."
Brocks at Rockwell Green, a Premier-branded convenience store near Wellington, Somerset is on the market as owners Simon and Rachel Brock are now looking to retire - after running the store for nearly 25 years.
Selling a wide range of products and everyday essentials, the store is “well-established and popular” among both the local communities.
“It has been a pleasure running the store for the last 23 years and serving the local community. It has been a tough decision to sell but we felt now was the best time to retire,” Simon said.
Specialist business property adviser Christie & Co has been instructed to market the property, which also features a variety of storage spaces, offices and independently accessed three-bedroom accommodation.
Matthew McFarlane, business agent at Christie & Co who is managing the sale, commented: “This is a fabulous store and property, offering a large sales area, great storeroom and residential accommodation. The sales figures are very strong which represents an excellent opportunity for corporate buyers or established multi operators.”
Wrexham Lager Beer Co Ltd, the oldest lager brewery still existing in Britain that has been brewing in Wales since 1882, has announced Rob McElhenney and Ryan Reynolds as new co-owners of the company alongside the Roberts family.
The acquisition was made by Red Dragon Ventures, a joint venture formed by The R.R. McReynolds Company, majority owner of Wrexham AFC, and the Allyn family of Skaneateles, New York. Red Dragon Ventures was created to drive growth in the Wrexham community and Wrexham AFC.
This transaction represents another landmark deal for the Welsh town and will considerably scale up Wrexham Lager’s infrastructure and international production, distribution, and marketing efforts.
“As co-chairmen of Wrexham AFC we have learned a lot,” said Rob McElhenney and Ryan Reynolds. “The connection between club and community, the intricacies of the offsides rule and the occasional need for beer – especially after finance meetings. Wrexham Lager has a 140-year-old recipe and a storied history and we’re excited to help write its next chapter.”
The Roberts family, who have owned and operated the business since 2011, will maintain an active role within the business, continuing to oversee quality control across all markets, local brewery operations, and community engagement projects.
Recently appointed chief executive James Wright will continue to lead the business after already overseeing rapid UK growth, as well as international expansion into Australia, Japan, and Scandinavia. Distribution in the US and Canada is set to go live in the coming months.
“This is a brand with great heritage – the oldest lager brewery in Great Britain, once enjoyed across the world,” Wright said. “So, to have Rob and Ryan onboard as we embark on international expansion is huge for us. They have been doing wonders for the town of Wrexham and strongly share our passion for once again seeing Wrexham Lager enjoyed in all the far-flung corners of the globe.”
Wrexham Lager Beer Co currently produces the 4% ABV Wrexham Lager, 5% ABV Wrexham Lager Export, and recently introduced 4.6% ABV Pilsener. The 4% Wrexham Lager is produced using an original recipe from 140 years ago that was once available in the world-famous Harrods luxury department store in London, as well as chosen as the only lager to be served on the White Star Line’s Titanic.
Ten global beverage companies have joined forces under a new industry-wide consortium, called REfresh Alliance, which is designed to help accelerate renewable energy adoption across the industry’s supply chain.
The new initiative invites additional companies from across the beverage industry to pool and scale their resources to remove barriers to renewable energy adoption in the supply chain, provide education on best market practices and support the industry’s transition to Net Zero.
Companies currently part of the REfresh Alliance include: Bacardi, Carlsberg Group, Constellation Brands, Diageo, Heineken, Molson Coors Beverage Company, Pernod Ricard, The Coca-Cola Company and Whyte & Mackay.
The programme is managed by leading energy solution provider, Enel X. Through its Advisory Services division, Enel X connects the participants with renewable energy providers and supports renewable energy transactions, aiming to accelerate renewable energy adoption.
The programe also features a dedicated educational platform to help program participants prepare for renewable energy adoption.
Scope 3 emissions, which are not directly produced by a company but from its supply chain, often account for approximately 90 per cent of a beverage company’s carbon footprint. As suppliers continue to face a number of barriers to decarbonisation, REfresh has already engaged with more than 300 suppliers to discuss their involvement in the programme as it aims to support their adoption of renewable energy solutions.
“We have long recognised the need for industry collaboration to deliver the most impact and to accelerate the transition across our supply chains,” Ralf Peters, chief procurement officer of Coca-Cola Europacific Partners (CCEP), and chairman, Coca-Cola Cross Enterprise Procurement Group (CEPG), said.
“I know from my experience across the Coca-Cola system that supporting our supply partners is a key part of our sustainability action – and that encouraging them to transition to renewables is one of the most impactful things we can do to help decarbonise their businesses, and to do the same in ours.”
Hervé Le Faou, chief procurement officer of Heineken, said: “Scope 3 emissions are one of the biggest challenges that the industry faces in delivering on our Net Zero ambitions. We must work together to identify areas of our supply chains where we can pool our resources to accelerate this transition for our suppliers. We look forward to working with other beverage companies to achieve this and accelerate the decarbonization of our industry.”
Jane Liang, chief procurement officer of Diageo, said: “The climate crisis is the most pressing issue of our time and the transition to Net Zero is becoming increasingly important. However, there is only so much we can do as individual businesses. The REfresh Alliance will drive collective action within the industry to accelerate the adoption of renewable energy. We are calling on all companies and suppliers within the industry to join us and support the industry in its transition to Net Zero.”
REfresh intends to initially launch in the mature renewable energy markets of Europe and North America, where it will be able to use existing networks to accelerate impact in support of the industry’s decarbonization efforts. As it continues to grow, the consortium will look to expand to other markets and welcome businesses from across the beverage industry to join it in supporting suppliers in their decarbonization journeys.
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Single-use disposable vapes are displayed for sale on October 27, 2024 in London, England
Vape industry bodies have raised concerns over chancellor Rachel Reeves’ budget announcement introducing a flat-rate excise duty on vaping products, saying it could hurt public health and increase financial pressures on consumers.
The new excise tax, set to begin on October 1, 2026, will add £2.20 per 10ml of vaping liquid, with additional VAT. This rate replaces the previous government’s proposed tiered tax structure, which many in the industry had criticised.
The Independent British Vape Trade Association (IBVTA) welcomed the shift from a tiered structure but voiced strong concerns about the overall impact on vapers, particularly those on lower incomes.
“The government has already proposed regulation that will ban single use products, which despite helping many adult smokers access vaping, have via irresponsible retailers been disproportionately accessible to children,” said IBVTA chair Marcus Saxton.
“It would seem a little questionable then to increase the cost of vaping, especially given there are still around six million adult smokers for who you’re trying to give every opportunity to make the transition to less harmful products.”
Saxton warned that higher costs could hinder the progress made by public services utilising vapes within their smoking cessation services, adding, “The IBVTA do not believe that any excise tax should be applied to products supplied via these services.”
The UK Vaping Industry Association (UKVIA) voiced even sharper criticism, highlighting the potential for the new excise tax to become an economic burden on adult vapers.
John Dunne, UKVIA’s director general, noted that the additional £2.64 per 10ml of e-liquid (inclusive of VAT) could result in a 267 per cent price hike for some e-liquids, a change that he described as “a kick in the teeth for former adult smokers who have switched to vaping to quit their habits.”
Dunne cautioned that the new excise rate would be “the highest in Europe,” and warned that it could deter adult smokers from considering vapes as a smoking cessation tool.
“Some 3 million adults are former smokers thanks to vaping, which is strongly evidenced as the most effective way to quit conventional cigarettes, saving the NHS millions of pounds in treating patients with smoking related conditions. This announcement today deters adult smokers from considering vapes as a method to give up their habits, and hits the lowest paid,” said Dunne.
He criticised the government’s approach, calling it a “revenue grab from former smokers” and noted the inconsistency with reduced VAT rates applied to other nicotine replacement therapies.
“It would also make more sense for vapes to be taxed at a lower VAT rate, which is the case for other nicotine replacement therapies, which have proven to be considerably less successful than vapes in helping smokers quit,” he said.
The budget also announced a consultation on new compliance measures, including vaping duty stamps and supply chain controls to combat illicit production of nicotine products. This consultation, open until December 11, 2024, aims to limit illegal manufacturing while ensuring the new duty’s effective enforcement.