It may be summer and schools have closed for the holiday season, but for many parents it will soon be time to plan ahead for the back to school shopping list, in a bid to get ahead of the crowd in getting sorted for September.

This is a key business period for retailers, following closely behind Christmas and Easter as one of the busiest times of the year for those in the industry.

From freshly sharpened pencils, notepads, calculators and lunchbox essentials to those all-important breakfast and snack ideas, it’s vital that retailers have their shelves stocked up and eye-catching for consumers.

Many customers will be looking for ways to make savings this year, as the cost-of-living crisis continues to put pressure on household budgets. With the prices of almost everything remaining high, parents will be keen to spread out the cost of the back-to-school shop and will be keeping a keen eye on their seasonal shopping.

In many cases, parents will be shopping for more than one child, so will be focusing on multi-packs or bundle offers as they remain price conscious, and where relevant may be willing to avail of saving schemes. (According to Mintel’s 2022 research, 39% of parents have used a buy-now-pay-later scheme for purchasing back to school items, while 25% would be interested in using this type of payment option in the future.)

There have been significant cuts in the education budget and continued financial strain on schools, they are in turn are becoming more reliant on contributions from parents to support the purchase of some stationery essentials. Suffice to say that parents will inevitably be bulk buying items such as blue, black and red pens and pencils, rulers, sharpeners and notepads.

With this in mind, retailers can maximise sales by planning events and promotions centring on price sensitivities, encouraging customers to shop in their stores. Price discounts and other incentives will help ensure sales and attract the attention of parents.

It is not just parents however, that will be shopping for back-to-school essentials, as older students also play a pivotal role in the buying process, be it influencing their parents’ purchases or spending their own money, so it is worth remembering this when planning promotions or in-store displays.

Additionally, multi-platform promotion and engagement with younger consumers can go some way to increasing sales. Students will see much of what they want or need for school online, so highlighting offers and availability on social media platforms is a key way of helping both online and in-store sales.

As households across the country continue to grapple with prices, shoppers are looking to make cost-savings wherever they can. As a result, homemade lunchboxes will be the ‘go-to’ solution for many parents looking to save money this year.

Research[1] has shown that 72% of consumers believe that a home-made sandwich for lunch is unbeatable. With sandwiches often a core component of any lunchbox, stocking a range of quality wrapped bread should be a focus for any retailers looking to cater for the back-to-school occasion.

While many shoppers may be looking to save money, there is still a huge desire for quality bakery products from recognised brands that consumers know and trust.

Another focus for lunch boxes should be in brown/wholemeal bread, which is the third biggest type of pre-packaged bread, accounting for nearly 14%¹ of loaves sold in Great Britain.

The traditional sandwich remains a key part of any lunchbox so making sure there’s a good range of pre-packaged bread on offer that caters for different tastes available at all times is essential to cater for the back-to-school trend. Combined, white bread, brown/wholemeal and half and half bread account for over 75% of the pre-packaged loaves sold in Great Britain over the last year[2]. Whilst bread with seeds and grains accounts for 18% and are extremely popular, they have more of an adult consumer profile.

Alongside a range of pre-packaged bread, offering a selection of classic kids’ sandwich fillers, such as cheese and ham, as well as fruit, will help retailers ensure they’re well prepared to respond to rising demand ahead of the return to school.

Creating a back-to-school occasion display can really help to drive impact in store. For example, displaying a range of lunchbox essentials, such as pre-packaged bread, sandwich fillers and fruit, next to or close to each other and offering cross-category promotions can help to boost sales. Where running promotions, using PoS in store can also help build shopper awareness of the different offers available and encourage them to buy multiple items in one shop.

Confectionery is worth £5.5bn within the UK treating and snacking market, which itself is worth £13.3bn, reports Wholesale Manager magazine, making it a hugely important category to independent convenience retailers looking to drive sales, indeed 75% of recent treats and snacking growth has come from confectionery sales alone (Nielsen).

There are three subcategories within confectionery: chocolate, gum and fruity confectionery.

According to Kantar, there has been a dramatic 597% increase in the popularity of blonde chocolate in the past 18 months. 65% of gum purchases are made on impulse (Nielsen), making it critically important for retailers to make gum available and easily visible for every shopper and every trip. Fruity confections are growing at +17% year-on-year (Nielsen).

According to Clare Newton, Trade Marketing Manager at Swizzels, consumers demand class.

“Sugar confectionery is worth £1.6bn, growing at 16.2% (Circana), which is a figure bolstered by demand from consumers for classic favourites as well as new and innovative products. The continuation of the production of these innovative products and flavours, as well as the availability of gifting lines are expected to drive further demand in the near future.

“Sugar confectionery has had a great reputation as being one of the best performing categories within wholesale, as customers are likely to make impulse purchases, especially when related products are merchanised together and have a price mark clearly stated on the packaging.”

[1] Perspectus Global, May 2023

[2] NIQ Scantrack, total coverage, incl. discounters, unit sales pre-packaged bread loaves by dough type, MAT to 22/04/23

TO SEE THE FULL BACK TO SCHOOL FEATURE IN THE JUNE-JULY ISSUE OF NEIGHBOURHOOD RETAILER, CLICK HERE

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While consumer habits have changed, with the pandemic and the cost-of-living crisis all having an impact on what purchases they make, retailers have an opportunity to tempt their tastebuds and increase sales in store.

Remaining a dominant force in the market, a high proportion of Northern Ireland consumers purchase each year – in the 52 weeks ending 18^th February 2024 99.5% of NI households purchased the category versus 99.2% last year^.

Its market worth = £201,198,000 +14.3% year-on-year with shoppers spending an additional £25.2 million versus last year.

Across the UK soft drinks market, at-home revenue amounts to £22.20bn in 2024, with the market expected to grow annually by -1.18%*.

Carbonated soft drinks accounted for 39.9% of the category share in 2022**, while across the calorie sector, demand is significantly increasing for low/no calorie soft drinks, claiming a 69.8% share in 2022**.

The volume sales of low/no calorie carbonated drinks grew by 11.9% during 2022**, while there was a 24.3% growth in volume sales in sports drinks across the same year**.

According to the 2023 British Soft Drinks Association report, volume sales of sports and energy drinks grew by 24.3% in 2022, with continued growth expected across 2023 and beyond. In 2022, the channel split was 94.7% off premise with 5.3% on premise.

In its five-year outlook for carbonated soft drinks, Mintel forecasts that health and sustainability will be key driving factors for consumers as they choose their CSDs.

The market was hit in 2023 by the income squeeze, rising prices in the category and poor summer weather. Price rises fuelled value growth, tempered by trading down.

The income squeeze took its toll on CSDs on-premise sales in 2023. While some occasions moved to retail, sales through this channel also stagnated amid the income squeeze and less clement summer weather.

Cola leads CSD retail sales by a long distance, while the leading players’ ongoing marketing and NPD drive engagement. Crushes were the star performer in 2023, bucking the volume decline in CSDs in retail, with high-profile flavoured launches a key driver.

With household budgets expected to remain under pressure in 2024, CSDs volumes will see little improvement, while value growth will slow as inflation decelerates, according to Mintel.

In their overview of how they expect the carbonated soft drinks category to perform over the coming five years, Mintel draws on its expertise in the market, market forecast and understanding of the key trends that are driving consumer behaviour.

It does predict real-term growth in 2025-2026, as household incomes regain momentum so too do they expect CSDs volumes to also regain momentum.

This will also facilitate trading up, including to on-premise, fuelling faster value than volume growth. The planned introduction of DRS in 2025 could bring disruption, but the industry is in a position to minimise this.

Looking ahead to the future (2027-2028), Mintel forecasts that health and sustainability will be more front of mind issues for consumers, firstly because of their improved finances and then this necessitates continued progress in both areas from brands.

The decline in 20-34s will pose headwinds, but the considerable appeal of new flavours holds potential for CSDs to continue to drive engagement, Mintel adds.

As observed in the British Soft Drinks Association’s 2023 annual report, 2022 was a healthy year for soft drinks, with volume sales up by nearly 8% on 2021 and low/no calorie drinks accounting for seven out of every 10 purchases made in the calendar year.

Ben Parker, GB Retail Commercial Director at Britvic said consumers have been feeling the pinch from rising living costs and inflation, with more shoppers being mindful of what they spend.

“In a bid to make their money stretch further, these pressured shoppers are expected to move toward smaller transactions and smaller pack sizes,” said Ben.

“At the same time, we’re also seeing a ‘lipstick effect’ where shoppers are switching from expensive purchases to treating themselves with smaller treats and indulgences.

“We have seen the trend for healthier products continue to increase among consumers and with the high in fat, salt and sugar (HFSS) regulations now in place, reduced sugar options when it comes to soft drinks will only continue to grow in importance,” he added.

“As a category, soft drinks was well prepared ahead of the legislation, following the introduction of the Soft Drinks Industry Levy which came into effect in 2018. Therefore, to date, soft drinks has been in an ideal position to help retailers with any shortfall from other non-HFSS categories,” said Ben.

“Flavour innovation is crucial in keeping shoppers excited by soft drinks and at a time when the cost of living is rising, it’s important to offer new products from well-known brands to help maintain basket spend.”

Looking ahead in 2024, Mintel forecasts a continued growth for the energy drinks market, but urge brands not to rely on past successes, stating innovation and evolving is key as the competitive landscape constantly shifts consumer demand.

“Interestingly, as the user base of energy drinks grows and diversifies, brands have begun to distance themselves from an overtly masculine image, which could open the door to even more growth amongst demographics who had previously slept on the energy drinks industry,” say Mintel.

“Over the past few years, consumer demands in the energy drinks industry have shifted. An increased focus on health has resulted in consumers looking for more than a sugary, caffeinated pick-me-up.

“More and more consumers want functional drinks that can help them achieve their health goals, rather than potentially hinder them.”

TO SEE THE FULL ENERGY AND SOFT DRINKS FEATURE IN THE MAY ISSUE OF NEIGHBOURHOOD RETAILER, CLICK HERE

^Kantar

*statista.com

**British Soft Drinks Association 2023 annual report

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Consumers like names they can trust and symbol groups are the perfect combination of local faces with trusted brands, thus encouraging return trade and a relationship between shopper and store.

The latest data from Kantar Worldpanel to 14^th May 2023, shows the Northern Irish grocery market saw sales grow by 8.5% in the year to 11^th June 2023, with shoppers spending an additional £308.4 year-on-year.

With grocery inflation at 16.1% for June, the average grocery bill is set to rise by £840, from £5221 to £6061 if consumers don’t make changes to what they are buying.

But shoppers are savvy, and are continuing to look for ways to manage household bills and as part of this, they are returning to store more often, picking up less each time.

What they are choosing to buy is also changing, as own-label items now account for a bigger share of the sector year-on-year. Indeed some €2.9 billion was spent on own-label groceries in NI in 2022 (estimated), with Mintel noting that 71% of Northern Irish consumers avoided buying premium products due to the cost-of-living crisis in 2022.

“Irish shoppers have felt the impact of increased grocery prices in 2022, and have shifted their shopping behaviour accordingly, with a greater level of consumers reporting that they are avoiding premium brands and many using more own-label brands and discounter retailers,” said Brian O’Connor, Senior Consumer Analyst at Mintel.

Convenience is key and is fast becoming the cornerstone of everyday life. Gone are the corner shops of yesteryear. It’s all about the customer experience – and symbol stores have taken that concept to heart – by making the efficiency and ease of shopping at the core.

The symbol sector has actively capitalised on making the ‘shopper experience’ at the centre of their business ethos – smart, stylish, well lit, clean, clear labelling – with value for money being the driving force – this savvy sense of driving the sector forward has its roots in research, category management, and sound business sense.

THE SHIFT TO SYMBOLS

Retail analysts are identifying a clear shift in consumer behaviour and attitudes that is favouring the convenience sector.

On average, shoppers are returning to store nearly 17 times more, but are picking up less volume -2packs when compared to this time last year.

These new attitudes towards grocery shopping are supporting growth in the convenience sector, meaning retailers should adapt to drive change and keep pace with these new shopper behaviours.

These trends are presenting the symbol sector with a new raft of opportunities. Along with technology developments, it’s a clear response to customer needs and demands. It’s being predicted that these trends are likely to continue to evolve rapidly over the next five to 10 years.

Travel and movement patterns have altered in recent years, with more people working from home, resulting in people travelling on the road at different times of day. These pattern shifts are also changing the way consumers view and use convenience stores – but most importantly, consumers want the assurances and certainty that a recognised symbol secures – that meets their expectations.

THE ’CONSUMER EXPERIENCE’

At the cutting edge of change, the symbol sector is creating great shopping experiences for consumers, alongside the essential services and facilities they are known for.

The Henderson Group, which boasts some 500 stores across Northern Ireland – a mix of company-owned and independent retailers – has committed to significant investments throughout 2023, with a capital programme of over £60 million to be invested.

“We are a successful, independent, family-run, family-owned business and we have an ethos and culture of continual reinvestment to drive the business,” said Paddy Doody, Sales and Marketing Director.

“That’s about partnering with our independent retailers, investing in their business, investing in new stores, investing in promotional and price activity to give better value to the shopper, and investing in our infrastructure.”

‘Shoppers in Northern Ireland spent an additional £6.7 million in symbols versus last year, with 76.7% of Northern Ireland households purchasing their groceries in a symbol group over 2023’

As food and drink prices continue to climb, with average prices up 10.1% compared to last year, the impact on shoppers’ budgets is unavoidable for many Northern Irish consumers.

As shoppers look for ways to manage costs, many are turning to cheaper alternatives such as retailer own-label lines, where sales are up £193 million compared to last year and versus branded products, which are up £119m year-on-year.

All retailers are seeing year-on-year growth in the latest 52 weeks. Total symbols are seeing the slowest growth among retailers, at 2.4% year-on-year.

Shoppers in Northern Ireland spent an additional £6.7 million in symbols versus last year, with 76.7% of Northern Ireland households purchasing their groceries in a symbol group over 2023.

On average shoppers pick up groceries in a symbol group 65.3 times over the course of the year, which is down only slightly, at 0.1% on last year.

LOOKING TO THE FUTURE

Retailers will need to continue to make efforts to be more sustainable, as 78% of Northern Irish consumers noted they consider their lifestyle to be environmentally friendly to at least some degree, notes Mintel.

Some 71% of Northern Irish consumers believe that unless there are changes from big businesses, the planet cannot be saved. As such, grocery retailers that can successfully display green/ethical initiatives to support sustainability, will likely appeal more to shoppers.

With more consumers struggling to justify ‘splashing out’, adding a sustainable angle to grocery shopping may help to alleviate any ‘buyers’ guilt that consumers might feel in splashing out in a time where they may feel they need to deny themselves luxuries.

Having set out to achieve a 12% carbon reduction by the end of 2023, SuperValu and Centra retailers have achieved a 9% carbon reduction, a year on from the launch of the €25m Musgrave Sustainability Fund.

In June last year, Musgrave announced the first of its kind €25 million sustainability fund aimed at realising this target and reducing emissions across its operations, ultimately to achieve net zero by 2040. In order to reduce emissions to net zero by 2040, Musgrave is aiming to achieve a 46% reduction in carbon emissions (Scope 1 and 2) by 2030.

Ian Allen, Managing Director of SuperValu and Centra said: “Our stores are at the heart of communities around Ireland, and we are proud that our network of SuperValu and Centra retailers are on track to reach our carbon reduction goal by the end of this year.

“Our retailers have shown real passion and enthusiasm to continue to lead by example and implement sustainability measures across their leading supermarket and convenience stores.”

Retailer Philip Woods, who operates four SuperValu and Centra stores in the Armagh and Portadown areas, has invested £660,000 to reduce his store’s carbon emissions and make them more sustainable, supporting brand owner Musgrave Northern Ireland’s sustainability goals.

Investing in new energy efficient refrigeration, LED lighting, and solar panels, the retailer has also been supported by Musgrave NI’s £3.6 million Sustainability Fund.

Mr Woods is the first retailer in Musgrave NI’s network to use the Sustainability Fund for solar panels, which have been installed by local company Solmatix into SuperValu Fruitfield, Richhill and Tandragee, plus Centra Dobbin Road.

The solar panels will reduce carbon emissions by saving a predicted 49 tonnes of CO2 across the four sites each year helping to achieve Musgrave NI’s overall target of net zero carbon by 2040. This is the equivalent to planting 1,856 trees.

TO VIEW THE FULL MID-YEAR SYMBOL REVIEW IN THE NEIGHBOURHOOD RETAILER JULY ISSUE, CLICK HERE

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Soft drinks remain a dominant force in the market with a high proportion of Northern Ireland consumers purchasing each year.

Challenging conditions in 2022 left the sector, like so many others, facing its own hurdles, but producers in the category have shown adaptability and resilience amidst rising costs, labour shortages and upheaval in the supply chain.

Soft drinks sales across the grocery, foodservice and licensed channels hit £19.2bn in 2022, a 25.6% year-on-year rise, worth an impressive £3.9bn at the tills, according to NielsenIQ. Compared to pre-pandemic sales, volume sales have grown by 6%, with discounters, convenience retailers and supermarkets all driving strong growth. 1

And with the heatwave across Northern Ireland at the end of May and into June, hopes will be high that a similar effect will occur for 2023 figures.

Another area of growth was the fruit carbonate drinks, which witnessed sales grow by 12.5% year-on-year in the total market.

Britvic retail commercial director, Ben Parker said flavour innovation is “crucial” in helping to keep consumers excited by soft drinks, particularly as they are dealing with the continued cost-of-living crisis.

“It’s important to offer new products from well-known brands to help maintain basket spend,” he added.

1 Grocery Mults, Impulse & Discounters, NielsenIQ RMS – Foodservice & Licensed CGA – 52 w/e 31/12/2022 v 52 w/e 31/12/2019

YOU CAN SEE OUR SPECIAL FEATURE ON SUMMER DRINKS 2023 IN THE NEXT ISSUE OF NEIGHBOURHOOD RETAILER, COMING SOON!

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Launches of new seasonal Easter chocolate products have increased by 19% over the last 12 months, with this year set to be a bumper year for Easter treats.

When it comes to regional launch activity, the UK is officially top of the chocs leading the way in Easter innovation globally. From March 2022 to February 2023, the UK was responsible for an impressive one in eight (16%) Easter chocolate launches, leaving chocolate lovers spoilt for choice.

Easter innovation has come on leaps and bounds in the UK according to the research, as the number of Easter-specific launches has grown almost 40% over the past two years.

Overall, Easter innovation accounts for 41% of all seasonal chocolate launches.

SUSTAINABLE ATTRIBUTES

The Mintel research also found that over the last 12 months, nearly three in five (57%) of Easter chocolate launches globally carried an environmental/ethical claim, up from less than half (48%) the previous year.

However, while the confectionary industry continues to respond to a number of sustainability issues, consumers are not as enthusiastic about sustainable attributes.

In the UK, ethical certification (9%) does not rank highly among chocolate purchase factors compared to other criteria, such as a favourite flavour (37%) or interesting texture (16%). Meanwhile, a quarter (25%) of UK chocolate lovers would be enticed by recyclable packaging.

Director of Insight, Mintel Food and Drink, Marcia Mogelonsky said: “Following several subdued years of Easter celebrations, chocolate lovers are set to enjoy an impressive array of chocolate eggs and novelties this Easter.

“As the world becomes more relaxed about social gatherings, celebrations will be more plentiful, sparking improved revenue for seasonal chocolates, especially those linked with an interactive component, like Easter egg hunts.”

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