There will be much to celebrate if Christmas 2010 is a repeat of last year. Though some consumers may be planning to spend less in the uncertain economic climate, retailers are pointing to the fact that fears over lacklustre sales proved unfounded last December, with some supermarkets even posting their best profits in years.
Waitrose made significant gains, with sales rising 17.6 per cent on 2008 in the four weeks to 27 December. Sainsbury’s and Tesco posted sales growth of 8.6 per cent and eight per cent respectively, while Asda enjoyed a 5.9 per cent increase.
Analyst Grant Thornton says the strong performances were due to the historically low interest rates, a continuation of the ‘buy now, pay later culture’ and the fact the larger, stronger retailers took action to reduce overheads and implement further supply chain efficiencies.
But that was last year. The country might officially be out of recession now, but concerns over unemployment are as high as ever and the upcoming VAT hike is playing on the minds of the money-conscious.
Retail forecasts for this Christmas are mixed. In mid-October, Tesco’s commercial director Richard Brasher declared that he was optimistic about the prospects for Christmas despite the looming tax hikes and public spending cuts.
Asda and Morrisons don’t quite share that optimism. Asda chief executive Andy Clarke says it’s going to be a challenging Christmas for customers and that some are already spreading out the cost. Morrisons’ CEO Dalton Philips predicts that people are going to save rather than splash out during the festive period.
“Our average customer now has close to £100 less in their pocket per month than they did a year ago,” Phillips says.
Whether that impacts on food sales is debatable. The traditional Christmas dinner is sacrosanct and the feeling among growers is that sales should be as strong as ever, particularly as supplies of the key lines are looking good.
Sprout growers are expecting a normal season following last year’s drama when snow and freezing temperatures resulted in supply shortages. Philip Effingham, chairman of the Brassica Growers’ Association (BGA), says that it has generally been a good growing season to date, with harvesting beginning at the start of September and the favourable growing conditions resulting in higher yields and a better quality crop.
The varieties Cobus and Aurelius will increase their market share this year, he says, with more acreage being devoted to them. Other varieties to watch out for are Davlin and Irene, which are both new this season, and BE2776 - another up and coming variety.
“All three of these varieties are from Bejo, which has been working hard on flavour,” Effingham says. Demand for sprout trees is rising and the trend looks set to continue. “Consumers like the convenience these offer - they just pick what they need when they need it, giving them extra freshness and less wastage,” he adds.
Red sprouts will also make an appearance and Asda will begin stocking them in early December. The sprouts are grown by John Lankfer Produce in Cambridgeshire and are said to have a milder, sweeter flavour than the green variety.
Meanwhile, Pam Lloyd PR has begun promoting Brussels sprouts and is encouraging consumers to take a fresh look at the vegetable. “There are now many different, sweeter varieties and we are using a variety of contemporary recipes with high quality images to get consumers to try new ways with sprouts,” says the agency’s Madeleine Waters. “The campaign needs more support from the industry and if you aren’t a member of the BGA or a contributing business, get in touch and sign up.”
Elsewhere, good citrus availability is forecast during the Christmas period. “Easy peelers are the cornerstone of Christmas sales and I don’t expect any problems with supply this season,” says Prag Mistry, managing director of Fruitmann. “If anything, there could be an increase in volumes and some fierce competition to supply the UK market.”
A number of countries including Spain, Cyprus, Turkey and Israel are all forecasting higher volumes in 2010-11.
Israel is a major supplier of citrus during the Christmas period and the constant reinvestment in orchards by growers has given it an advantage, Mistry says. “Some Spanish growers have invested heavily in their operations too.”
On dates, greater volumes are available for export from Israel following the number of new plantations of Medjoul dates and the resultant rise in production, according to Oded Yacovson, general manager of Agrexco UK. Israel is a key producer and supplies dates throughout the year, with Agrexco focusing on the Arava growing area, and sales traditionally building over the festive period.
Yacovson says demand for dates is stable, but he acknowledges that some consumers are still hesitant to try them despite the better news that the younger generation seem more willing to purchase now.
Marius du Plessis, MTEX UK general manager, says that dates are seen in the UK as more of a Christmas line, but the fruit also has strong links with the Islamic festival Ramadan and retains its market position year round.
California is forecasting a slightly larger date harvest this season. The Golden State kicked off with the Medjoul variety, followed by Deglet Noor. More than 80 per cent of the dates grown in the US are produced in California.
Cranberry consumption has been stable in recent years and Darren Matschull of importer JO Sims doesn’t forecast any shift in demand this year. The vast majority of cranberries are processed, and Matschull says that as most US growers do not have GlobalGap accreditation, fresh cranberry exports to Europe are unlikely to rise in the near future. Though earlier forecasts initially pointed to a bumper crop, poor weather conditions in key growing areas has resulted in a drop of more than six per cent compared to previous industry estimates.
The US, a key nut producer, also has a significantly higher nut production for this year, with almonds up nine per cent, walnuts up 20 per cent, pecans rising 53 per cent and pistachios up three per cent. It all bodes for good availability.
Of course, the pungent smell of a fresh Christmas tree is enough to warm any cold heart and producers are hoping that demand will be just as strong this year.
“Last year was the best one we’ve ever had in terms of income and sales of trees, but it’s hard to say if there’ll be strong demand for British Christmas trees this year - usually Christmas is a time when people forget all their troubles but we’ll have to see how people feel following the government’s spending review,” says Roger Hay, secretary of the British Christmas Tree Growers’ Association (BCTGA).
For the past three years, there has been a shortage of available trees due to lower competition from overseas. UK plantings have subsequently risen in the last couple of years but it will take 10 years before the results come to fruition.
Nordman Fir remains the most popular tree, accounting for 60 per cent of sales.
Fraser Fir is also in demand and though it’s more challenging to grow, it sells at a premium. A further boost for production is that the number of BCTGA members has swelled in recent years and Hay says the association now has the highest number it has ever had.
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