Data from retail analysts IRI shows unit sales of seasonal cakes and puddings in major UK supermarkets were 6.2% lower - roughly a million units - in the first two weeks of December than in the same period in 2014. In value terms, this is a drop of 5.3% year on year in the two weeks, to $40.3m (£27.1m).
The decline is ahead of the overall UK grocery market, which recorded a 1.3% fall in value sales, driven primarily be intense pricing competition as UK supermarkets fight for market share in the face of the growth of discounters such as Aldi and Lidl.
Sales shift to discounters
IRI’s data does not include the discounters, and the decline in sales of cakes and puds could partly be a result of sales shifting to these retailers, suggested IRI head of strategic insight Martin Wood.
“Aldi and Lidl are very strong in cakes and puddings, particularly with products such as stollen where they do a very good job,” he told BakeryandSnacks, adding it was possible shoppers were turning to non-supermarket retailers such as Costco for some of their Christmas food.
“It could also be down to people taking a more healthy approach to Christmas but it’s too early to say whether this trend will continue - and we expect figures to bounce back during a busy Christmas shopping period this week.”
Simon Hatcher, operations director at UK-based branded and own-label puddings supplier Cole’s Puddings said his business had seen an increase in demand for traditional-style puddings this year, adding “the more innovative idea puddings such as our new Stollen Christmas Pudding, which has a marzipan center and amaretto almond liqueur, generate interest but do not maintain sales as well as the stalwarts such as Cole’s Classic Christmas Pudding”.
Price deflation
Another key Christmas category, crisps and other ‘salty snacks’, has been hit by price deflation. Sales are down $5.3m (£3.6m) - or 4.5% - this year compared with the first two weeks of December 2014, despite an increase in unit sales.
In contrast, snacking nuts and fruits, which are perceived as more healthy, are up 3.3% year on year by value, with unit sales up by 2.1%
“People are buying dried fruit as one of their five recommended portions of fruit or veg a day,” said Wood. “This is clearly a growth area and is being driven by snacking rather than shoppers buying fruit and nuts as a home baking ingredient.”
Although cakes, puds and snacks have lost a little steam this year, IRI reported a strong performance for some parts of the Christmas market, with spirits driving a 3.3% rise in sales of alcoholic drinks.
Source: IRI Retail Advantage