When we talk about Christmas, what are the first things that spring to mind? Santa, presents and family? In the produce industry it’s Christmas dinner, of course. Christmas marks an important date in the retail industry’s diary, and this is particularly true for fresh produce as key items take pride of place at the front of stores to lure in shoppers. Fruits and vegetables are a staple alongside turkey on the plate, but how did produce perform last Christmas, and what indication can this give us for Christmas 2015? Amir Jalaly, business development director at Kantar Worldpanel, analyses the results for Produce Business UK readers
View the full presentation here.
“Price point was the key factor for fresh produce [sold] during Christmas 2014; deflationary prices drove spend out of the market but brought about good volume growth,” explains Jalaly.
“This particularly came through shoppers buying more per trip than they did the Christmas before. Potatoes were the biggest contributor of volume growth within the produce market, accounting for 33% of growth.”
Looking at Slide 3, Kantar Worldpanel reports that frequency during the four weeks to the week ended January 4, 2015 was seven trips, up 0.9% on the year-earlier period, with 2.4kg purchased per trip, an increase of 2.1% over the same period.
Spend on produce last Christmas
Value -4.5%
Volume +4.5%
Price per kg -8.6%
Produce performance
So how did the ‘classic Christmas’ produce items fare? Apart from legumes, Jalaly says each of the wholehead produce sectors experienced volume growth last Christmas. In particular, Jalaly indicates that Christmas is a very crucial time for citrus, brassicas, root crops and potatoes, with between 8% and 11% of their total volume sold in the four weeks surrounding Christmas.
%age of volume sold at Christmas
Total Produce 7.5%
Citrus 10.3%
Brassicas 10.3%
Root crops 9.2%
Potatoes 8.6%
Promotions were also significant over the Christmas period with twice as many potatoes being sold on deal compared with Christmas 2013, and 1.7 times more root crops (including carrots and parsnips), sold on promotion.
Total price reduction deals were the most widely used promotion, especially in potatoes and root crops. However, when Kantar Worldpanel looked more closely at potatoes, Brussels sprouts, carrots, parsnips and easy peelers, Jalaly says all saw volume growth at the cost of value decline.
“Value was sacrificed in order to gain volume across all of the produce Christmas classics,” he explains.
Channel performance
Looking at channel performance over Christmas, Jalaly says online was a key retail channel for fresh produce shopping during the festive period, becoming the only channel to see value growth in produce.
Looking at Slide 12, Kantar Worldpanel found that online had a wider appeal, increased capacity and lower reliance on promotions. Some 12% of shoppers used online last Christmas, up from just 7% in 2010, while 6.4 million transactions took place on line, up 20% year-on-year, with Tesco delivering half of them. Full price sales delivered 35% of growth.
An extra 308,000 households brought produce online last Christmas
21m households have internet access
3.1m used the internet to buy produce last Christmas
“At a total grocery level, online performed well and actually had a lower reliance on promotions making it an important channel to focus on in order to gain back value growth since full price sales delivered 35% of growth,” Jalaly points out.
“Even when we focus specifically on produce, online was the big winner seeing value and volume growth through 3.1m households buying produce online this Christmas. However, there is still room for this to growth in Christmas 2015.”
View Kantar Worldpanel’s full presentation here.
