The supermarket and the consumer at Christmas


Christmas Shopping2

With the winter nights closing in, fireplaces being lit and hot chocolates warming hands, Christmas is coming and the supermarkets know it.

Months of preparation are about to be put to the test as each looks to usurp its rivals for a larger piece of the action. Being a winner or a loser during the highest spending period of the year can determine the success of failure of a business.

Discount retailers sent a strong message to the traditional market leaders last year with both Aldi and Lidl achieving the greatest gains. An increasing number of people seem to have realised that such stores provide comparable quality at lower costs.

Despite the recession having disappeared into the distance with the resurgence of property value and general spending, optimal value for money has remained a bastion of modern consumerism. Customer loyalty is waning as people fill their metaphorical shopping basket with products from a variety of stores – a trend that poses a major threat to chains like Morrisons, which saw underlying sales decline by 5.6% last year.

Surprisingly, the others continuing to fare well are the upmarket grocers like M&S, Waitrose and northern chain, Booths. Those able to afford quality and provenance at Christmas are skipping the middle market and opting for the chains renowned for these distinctive services. While often criticised for its struggling clothing ranges, M&S food has become synonymous with indulgence.

The rising power of both discount and quality retailers has incited a response from major players. Tesco has reacted to this squeeze from both sides by trying to move upmarket. However, its longstanding image and reputation is impeding the progress of this bold transition.

On the other hand, Morrisons is attempting to undercut the stores at the other end of the market by offering a cheaper and simpler shopping experience. It is currently in the process of reducing the prices of 1200 product lines at a cost of £1bn as well as investing heavily in promotions.

Bosses hopes the chain’s new Christmas advertising campaign will help reverse its fortunes this Christmas. The number of products in each line has also been diminished to simplify the choices consumers make.

Overall, the promiscuity of consumers’ shopping habits appears to be helping them out. As promotional activity reaches unprecedented levels, consumers are enjoying the results of fierce price and quality wars between supermarkets.

Yet from a different angle, the predilection of people to lavish each other with gifts, food and wine to replace what is the coldest and darkest time of year is the force that keeps our high streets alive.

In many ways, it is the hearts of the people that provides the wood for society’s fire – and that seems a god reason for why Christmas brings merriment to many.


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