Almost two-thirds of independent retailers will not be stocking selection boxes this Christmas - because they don’t believe they can compete with the supermarkets on price.
A week after Tesco ran a buy-one-get-two-free offer on a £3 Cadbury selection box, a poll of 250 independent retailers carried out for The Grocer by Cheethambell JWT, revealed that 63% of indies had decided not to include selection boxes in their festive line-ups this year.
They blamed heavy promotional activity from the supermarkets, which has sent the average price of a selection pack - after promotions - tumbling from £2.86 on 12 November 2010 to £2.46 this year [BrandView]. The typical saving, meanwhile, has risen from 31.2% to 32.7%.
The market is also in decline, falling 5% in 2011 year-on-year to £30.7m, according to SymphonyIRI data [20 w/e 31 December 2011], with value sales through indies down 8%.
As a result, suppliers such as Nestlé have “not recommended” selection packs to their indie retail customers this year.
“They are space-hungry and a low priority for independents,” said a spokesman for the confectioner, which has axed its largest selection packs this year because of promotional pressure.
Indies should instead stock products such as chocolate novelties, smaller cartons of chocolates and large tubes of sweets, suggested Nestlé.
Another supplier advised customers to keep their eyes “wide open” with regard to the supermarkets and not get drawn into a price war. “Some use festive confectionery as loss leaders,” he said. “Indies need to look beyond products the mults are scrapping over - why join the fight?”
Tesco said it worked hard to offer customers value for money through everyday low prices and price promotions.