Fine food industry insiders predict a ‘big blowout’ this Christmas

In April, the UK’s first full month in lockdown, the economy shrank by 20% and the number of people claiming unemployment benefit shot up by 856,500 to a total of 2.1 million. A further nine million UK workers were having their wages paid by the government through the furlough scheme, which is due to end in October – meaning unemployment may rise further towards the end of the year.

Research by EY found that almost two-thirds of UK consumers expect a global recession, and over half believe that financial stability is years away. According to researchers at Kantar, shoppers will cope with this in different ways, with some opting for cheaper products and others simply buying less. Still, with consumers shifting their spending away from pubs and restaurants, the grocery segment is expected to benefit. Kantar’s researchers predict the grocery market will grow 13% in 2020 compared with the previous year.

Despite this new frugal attitude, researchers believe consumers with financial flexibility to look for little ways to brighten their days amid the gloom of the pandemic, and many will still want a big Christmas blowout. “In the last financial crisis, we saw people treating themselves more at home. An in-home treat is still less expensive than a meal out (M&S Meals for Two benefitted from this). And 30% of UK respondents confessed to ‘treating themselves more’ during lockdown (Kantar COVID-19 Barometer),” says Rosie Hawkins, chief innovation officer at Kantar.

Paul Hargreaves, chief executive at Cotswold Fayre, adds that having traded through two deep recessions before, he’s seen sales of speciality food actually risen in inverse proportion to recession. “Clearly this recession will be deeper than both of these, but people still need to eat and will treat themselves with quality food this Christmas to cheer themselves up, especially as extended family gatherings have been scarce this year.”

But while hopes for Christmas shoppers are undimmed, consumers’ finances will undoubtedly be squeezed. Businesses must work hard to strike a balance between retaining their reputations for fine food and gifts and ensuring they don’t alienate their customers.

Offering a broader range of price points so as not to exclude those with less money to spend is a good option, according to Hayley Waters, marketing manager at Springvale Foods. “Allowing consumers to still buy fine chutneys for cheese but with the option of a lower priced range will show customers your thoughtful consideration and your adaptability to the new normal.”

While marketing and adverts will need to bring some festive sparkle, Matt Botham, strategic insight director at Kantar, says that they should also promote value for money. Rosie adds: “Some of the Easter advertising fell short as it showed family gatherings that simply weren’t feasible at the time. And some of the stores weren’t able to offer delivery slots or didn’t have a home delivery service at all, and so access to the store and their offers was difficult.”