Welcome to the September Grocery Trader. If you’ve managed to soak up the sun somewhere pleasant during the summer, good for you! After the August weather washout here, our lovely climate will probably give us a golden autumn. It certainly looks like we’re in for golden sales in the multiple grocers.
The first major cash contributor is ‘Back To School.’ Never underestimate the size of the Back to School market! After the end of the spending wave triggered by the World Cup, the UK’s retail pundits were looking around frantically for the next big wave of spending to bolster activity in store. They latched onto Back To School as the next major opportunity, and with good reason.
Lunchboxes and everything in them – food for school, food wrappings, sweets, soft drinks are very big business indeed. And then there’s clothing, and stationery for class and home. And these days, there’s the back to school lap top back pack as well. So as the leaves turn brown and the roads clog up once more, it’s time for The Grocery Trader’s last minute revision session on Back To School.
The second cash contributor is of course Christmas. Over in the town centre, they’ve probably already put up the Christmas decorations in your local department store. So, welcome to our first Christmas feature of 2010! Get over it: when this comes out, Christmas will be three short months away. We’ll be bringing you more news of Christmas products and promotions in The Grocery Trader between now and December.
When should supermarket people roll out their Christmas displays? Mid August, like the department stores? According to one major confectionery supplier, Christmas is ready to launch in November as soon as the Halloween and Bonfire Night displays have finished, which sounds more reasonable.
Given the other horrors in our economy, the UK retail sector has proved remarkably resilient at Christmas in the last couple of years, as consumers do their level best to forget their troubles and enjoy themselves with friends and family. As always, you can bet your turkey dinner it’s going to be a big business opportunity, but this time round could be even bigger.
The third major money maker in store this autumn is going to be consumers shopping ahead of the 4 January 2011 VAT increase from 17.5% to 20%. This is is expected to hit all income groups hard. Depending who you ask, there are concerns that it could go on to stoke inflation, cause cash flow problems, push some businesses into insolvency and trigger higher interest rates.
But before all that, we can expect the VAT hike to lead to a spending spike between now and New Year. Canny shoppers will behave like they always do and bring forward their planned spend on white goods and big-ticket items, to beat the rise. And much of it will be in supemarkets. Here’s to that!
Have a successful month.
Charles Smith, The Grocery Trader