Make candy’s meltdown work for your stores

Articles
April 23, 2009

Make candy’s meltdown work for your stores

For a sweet moment at a time, candy pulls us back to childhood days—a time when a whole generation of kids felt cared for and secure. No wonder people want to retreat from today’s stern economy. Unlike food and beverage essentials that fuel our bodies—yet are redlining or are barely in the black—candy is the ticket to brief escape. It soothes our stresses, and serves as the centerpiece of our emotional eating. Plenty of people say they’re eating healthier and exercising more to be battle-ready these days, but we at SupermarketGuru.com suspect that just as many would indulge in these low-cost items as long as they remain within their budgetary grasp. One narrow view of candy can be found in independent shops in major cities where foot traffic is dense, anxiety is high, and impulse buying seems higher still. They have bins and bins of Tootsie Roll, Bit-O-Honey, Swedish Fish, Mary Jane and other classic candy brands that stir pleasant memories and induce purchases. Yet the candy department just took a turn for the worse in U.S. food, drug and mass merchandiser stores (including Walmart) during the four-week period ended March 21, 2009.Until then, candy was looking impervious to economic pain by posting dollar sales gains in practically every four-week period of the past two years. It managed that performance, even when equivalized unit volume trends began to turn negative in the four weeks ended October 4, 2008.

For a sweet moment at a time, candy pulls us back to childhood days—a time when a whole generation of kids felt cared for and secure. No wonder people want to retreat from today’s stern economy.

Unlike food and beverage essentials that fuel our bodies—yet are redlining or are barely in the black—candy is the ticket to brief escape. It soothes our stresses, and serves as the centerpiece of our emotional eating. Plenty of people say they’re eating healthier and exercising more to be battle-ready these days, but we at SupermarketGuru.com suspect that just as many would indulge in these low-cost items as long as they remain within their budgetary grasp.    

One narrow view of candy can be found in independent shops in major cities where foot traffic is dense, anxiety is high, and impulse buying seems higher still. They have bins and bins of Tootsie Roll, Bit-O-Honey, Swedish Fish, Mary Jane and other classic candy brands that stir pleasant memories and induce purchases.

Yet the candy department just took a turn for the worse in U.S. food, drug and mass merchandiser stores (including Walmart) during the four-week period ended March 21, 2009.Until then, candy was looking impervious to economic pain by posting dollar sales gains in practically every four-week period of the past two years.  It managed that performance, even when equivalized unit volume trends began to turn negative in the four weeks ended October 4, 2008.

Since then, both the dollar sales gains and the concurrent EUV declines were in the low single digits. But candy experienced a meltdown in the latest four-week period ended March 21, 2009: sales shrank by 33.2% to $755.0 million, while EUV dried up even further, down 39.3% to 183,286,413 units, Nielsen data showed.

In these weeks with no holiday incentive to buy candy—right in the middle of Valentine’s Day and Easter, which fell on April 12 this year—many culprits emerged. Of 12 candy segments examined, the dollar sales of 11 were down, nine of them by double-digit percentages vs. the same year-ago periods. The single gainer was significant, however: Chocolate candy, which accounts for 40% of candy’s annual $10 billion sales, was up by 1.2%, albeit on an 11.3% EUV decline during the four-week period, according to Nielsen.

We urge retailers to devise promotions that play on candy’s key role today for sensitive, anxious shoppers, and base them on available candy data. One example: Since people have begun denying themselves candy (even though they want it), stores could endear themselves by finding ways to give it to them for free or low cost. After-hour parties, contest giveaways and purchase incentives might be a few welcome distractions today. How about an Oldies Night with ‘60s music and classic candies? Or a Juvenile Jeopardy game, where the winner gets to donate a giant 20-pound chocolate bar to a local charity?