Christmas spend set to fall by 15%

October 30, 2009

Despite signs that the recession is beginning to pass, research we conducted in the past week paints a worrying picture for the high street.  The run up to Christmas is the busiest time of the year for most stores; indeed many rely on this period to make any profit in the year. Results from our survey show, however, that the average spend on non-food goods this Christmas is set to decline by 15%.   As many as a third of all shoppers also believe that they will be spending less this Christmas than last year, with a little more than half believing that their total non-food spend will be unchanged. Unsurprisingly, the main reason given to explain this is that they are ‘cutting back’ in the face of the recession.

In further worrying news for the high street, shoppers project that almost 30% of their non-food shopping will be done online this Xmas, with as many as a quarter of respondents doing more so this year than in 2008.  We also found that around one in 10 shoppers say that they are ‘definitely holding back’ their purchases this year in anticipation of pre-Christmas sales.  This shows a rise compared to our previous research. A further third believe that they will hold back ‘somewhat’ this year – as a group these shoppers make up more than twice the proportion of previous years.  Clothing remains the most popular category to hold back on in anticipation of sales, but toys and games are estimated to be well up on previous Xmas research, as are electrical items.

The power of vouchers

September 18, 2009

A recent survey we conducted showed that a massive 97% of diners interviewed use restaurant vouchers, thus allowing the offer to dictate both where and when customers eat out nowadays.

What is great is that restaurant operators are able to continue to grow sales by stimulating both frequency and spend with such an attractive discount offer AND as a result guests can still afford to go out for a meal in the current climate.  So commercially the concept of a discount works at many levels and even the hit on the food margin should be more than compensated by the savings in labour that will result as the volume of customers increase. 

Such is the approach from head office but one core issue is ensuring buy-in throughout the team.  Is the strategy really understood by all staff, especially those front-of-house who actually serve the guests?  For example, the waiter who is probably the least likely to spend his hard earned cash on eating out at a table service restaurant. He may wrongly perceive the discount-carrying guest as a bit of a ‘cheapskate’, who is unlikely to leave a tip and is not deserving of full-paying guest level service.

The new rules of not only surviving but thriving in the high volume world of the casual dining market are that diners want a really good deal ideally,  2 for 1 or 50% off, AND guess what, they want it with the same standards of food quality and service, if not better!  Gone are the days that it was too embarrassing to present a voucher as part payment of a bill, I would go as far to say that it is now not just acceptable that diners admit to using vouchers on a date – the new cool is getting a deal!

So will diners ever go back to paying full price once the recession is over?  I would say probably but who knows what will happen next?  At the end of the day being continually aware of what diners are thinking and expecting and adapting to maximise the opportunities of any prevailing market conditions is what has and always will be a fundamental in succeeding BUT never ever compromising on quality, standards and service.

At the end of the day the maxim that says ‘it’s about value rather than price’ is as true today as ever.

Last orders?

January 22, 2009

With reportedly nearly four pubs closing down every day is there now a need for the traditional pub to redefine itself? How can a pub maximise its sales opportunities? Does it even know what they are?

The factors behind the current problems are well documented. Cheap supermarket booze, the smoking ban, an ageing population, drink drive awareness campaigns, all now combined with the current economic environment. In these conditions pub operators probably need to think beyond cost reduction initiatives and explore initiatives that will both keep those customers they already have happy and find ways to tempt others back into their locals. With a raft of restaurant deals out there of which 2-for-1 offers are becoming the norm one local pub has gone even further and introduced the £1 meal. Apparently customers have been queuing up to try the home-cooked pub grub at The Piltdown Man near Uckfield in East Sussex. I hope they have done their sums on this one since it seems like a fantastic offer which I must surely try myself.

There are other ideas around, but not necessarily linked with pubs but that seem to make some sense include a dropping off point for goods bought on the internet or a place to recharge electronic equipment such as laptops, ipods and phones. Whatever the solution might be, the pub along with the post office, and even the church, now more than ever needs to define its place in our lives. According to The Guardian there are now 350 village pubs that are also shops, or post offices, cook school meals, or provide IT training.

Heading for a bad Xmas?

November 3, 2008

The conventional wisdom seems to be we’re heading for the worst Xmas in years.  Well I seem to remember that was the story in 2007, and 2006 and maybe 2005 too.  Let’s face it bad news sells, but how bad will it be?  It is interesting that research we conducted amongst shoppers back in the spring recorded quite consistently the highest levels of spend on non-food goods we’ve seen.  Now that was before all this talk of the credit crunch.  So what about now?  Well what I’ve been hearing and seeing in our recent research is that whilst shoppers have felt the pinch on grocery and it is clear they are behaving differently to a year ago.  But in terms of non-foods it seems that people want a good Xmas so don’t be surprised if we see another late Xmas surge.