As the make-or-break winter holidays approach, there is never a better time of year to take a closer look at consumer spending patterns and which products and trends will be top of mind among bakery, deli and cheese shoppers for the Christmas season. There’s certainly a huge amount of dollars at stake. Bread and rolls, cookies and sweet goods are three key bakery categories that enjoy their biggest weeks of the year leading up to Christmas. The holiday ranks second for pies and third most important for cakes. In the deli, Christmas ranks first for deli prepared foods and rotisserie chicken.
First, let’s take a bead on consumer attitudes about spending.
According to Mintel’s new report American Lifestyles 2015, nonessential categories, including dining out, are expected to see the greatest gain of about 27 percent over the next five years, a key indicator that the 2015 holiday season should see a slight improvement over 2014. Improving personal finances, shifting demographics and consumers balancing spending priorities by trading up or down rather than cutting spending entirely or splurging across the board will drive these increases.
US consumer expenditures increased 3.4 percent in 2014, with spending in recreational categories including vacations and tourism showing the greatest gains. In line with economic growth is increased consumer confidence, as January 2015 was the first time that confidence eclipsed the pre-recession high. Household spending expectations appear to have stabilized post-recession with nearly one in five consumers planning on spending more month-over-month. These factors point to increased spending in 2015, which Mintel forecasts will increase by 3.9 percent.
Fiona O’Donnell, lifestyles category manager at Mintel, says that improving personal finances are driving consumers to revert back to pre-recession spending habits. “Our data shows a continuing trend of increased spending for enjoyment purposes, including purely recreational categories of vacations and tourism, as well as alcoholic drinks and dining out.”
Now, let’s examine a few key consumer trends shaping the landscape for the 2015 holiday season.
Technology, and its all-important role to add convenience to the grocery shopping trip, is playing a much bigger role in how supermarkets plot their strategies to capture higher holiday sales.
Andronico’s Community Markets, a privately owned grocery retailer offering a full range of specialty, organic and conventional groceries, recently launched an e-commerce food store specializing in local and specialty foods of the San Francisco Bay Area. The five-store operator made a big splash with the hiring of Suzy Monford as chief executive officer.
The former director of deli, cheese and prepared foods for H-E-B and director of food service for H-E-B Central Market, Monford most recently held the role of Head of Innovation for Woolworth’s, the largest retailer in Asia Pacific, where she was recruited to lead strategic change and international joint ventures. Previously she founded Food Sport International, working with Coles Supermarkets in Australia as her primary client. Other clients include Cheers Inc., a restaurant corporation in Texas, where she worked as CEO/president. A certified health coach, Monford has served on the executive board of directors for both the San Antonio Mayor’s Fitness Council and the YMCA, and actively teaches fitness and health in her community.
“At Andronico’s, one of our core merchant principles is to build healthy communities while we build our business. We believe that you can do well, by doing good. To that end, I’ll be introducing a new innovative approach to health and wellness that is a major departure from the role that the supermarket industry has traditionally played. Fitness—in all aspects from kitchen to shopping to cooking to dining—will be the way ACM delivers on its promise to advocate for community and our own corporate health. We’ll pioneer recipes for fit living for our shoppers and teammates."
Monford’s plans include innovating store formats with eventual store expansion and embracing and utilizing the latest technology available in the grocery industry to drive value, convenience and to energize the shopping experience. “We may be a small company, but we’ll be brilliant with data and digital,” Monford adds. “We’re going to marry traditional brick and mortar mercantile, with best of class tech in order to create a relevant shop for today.”
Monford plans to develop new products and concepts throughout the Andronico’s stores that will redefine value and serve each store’s diverse community. Chief among her priorities include an emphasis on speed and convenience, including bringing on new delivery App Instacart throughout the chain by mid-summer, and developing a new fitness and health-centric shopping portal for customers and teammates.