Economy
20 March 2023
Easter spending expected to blossom to a record $24B in 2023
The National Retail Federation predicts all-time highs for Easter shopping.
Photo by PAÏMA BEAUTE on Unsplash
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Easter shopping is expected to take a big hop to historic highs in 2023.
According to a survey from Prosper Insights & Analytics and the National Retail Federation:
- Easter spending is expected to reach $24 billion in 2023.
- That’s up from $20.8 billion in 2022, and would be well above the previous record of $21.7 billion recorded in 2021.
- 81% of Americans are expected to celebrate Easter this year.
- Average spending per shopper is expected to be a record $192.01.
The sunny projections for the April 9 holiday will be a welcome sign for retailers who are facing headwinds from inflation. It helps that Easter often fits into the category of more affordable indulgences such as small gifts and candy. These categories are often resilient amid tougher economic times.
“Easter endures as an important holiday for many Americans, signifying new beginnings and a time of celebration with friends and family,” NRF President and CEO Matthew Shay said. “As consumers plan to mark the occasion through a variety of traditions, retailers are dedicated to making this year a memorable holiday.”
The items: Top categories for spending include candy ($3.3 billion), gifts ($3.8 billion) and food ($7.3 billion). Additionally, consumers are expected to spend $4 billion on clothing, $1.8 billion on flowers and $1.7 billion on decorations. Another $1.1 billion is expected in greeting card purchases.
The channels: A majority (54%) of consumers plan to spend at discount stores. Other shopping locations include department stores (42%), online (33%), local and small businesses (22%), and specialty stores (20%).
The deals: Among those consumers who are celebrating the holiday, there is plenty of opportunity for offers to attract shoppers. Significant numbers of consumers say they will shop because of sales or promotions (29%), store displays or decorations (23%), or seasonal products (20%). Even among those who don’t plan to celebrate the holiday, 54% plan to take advantage of Easter-related deals, with a focus on candy and clothing.
“We are seeing real Easter sales growth compared with pre-pandemic, and among the drivers are consumers who are planning to purchase more Easter clothing and gifts,” Prosper Executive Vice President of Strategy Phil Rist said. “Additionally, consumers ages 35 to 44 will bump up their spending more than any other group.”
NRF and Prosper surveyed 8,499 U.S. adult consumers from March 1-7.
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Marketing
09 June 2023
'There's a lot of ways to frame value'
Campbell Soup Company CEO Mark Clouse offered thoughts on messaging amid inflationary shifts in consumer behavior.
Photo by Kelly Common on Unsplash
After months of elevated inflation and interest rate hikes that have the potential to cool demand, consumers are showing more signs of shifting behavior.
It’s showing up in retail sales data, but there’s also evidence in the observations of the brands responsible for grocery store staples.
The latest example came this week from Campbell Soup Company. CEO Mark Clouse told analysts that the consumer continues to be “resilient” despite continued price increases on food, but found that “consumers are beginning to feel that pressure” as time goes on.
This shows up in the categories they are buying. Overall, Clouse said Campbell sees a shift toward shelf-stable items, and away from more expensive prepared foods.
There is also change in when they make purchases. People are buying more at the beginning of the month. That’s because they are stretching paychecks as long as possible.
These shifts change how the company is communicating with consumers.
Clouse said the changes in behavior are an opportunity to “focus on value within our messaging without necessarily having to chase pricing all the way down.”
“No question that it's important that we protect affordability and that we make that relevant in the categories that we're in," Clouse said. "But I also think there's a lot of ways to frame value in different ways, right?”
A meal cooked with condensed soup may be cheaper than picking up a frozen item or ordering out. Consumers just need a reminder. Even within Campbell’s own portfolio, the company can elevate brands that have more value now, even if they may not always get the limelight.
The open question is whether the shift in behavior will begin to show up in the results of the companies that have raised prices. Campbell’s overall net sales grew 5% for the quarter ended April 30, while gross profit margins held steady around 30%. But the category-level results were more uneven. U.S. soup sales declined 11%, though the company said that was owed to comparisons with the quarter when supply chains reopened a year ago and expressed confidence that the category is seeing a longer-term resurgence as more people cook at home following the pandemic. Snacks, which includes Goldfish and Pepperidge Farm, were up 12% And while net sales increased overall, the amount of products people are buying is declining. Volumes were down 7%.
These are trends happening across the grocery store. Campbell is continuing to compete. It is leading with iconic brands, and a host of different ways to consume them. It is following that up with innovation that makes the products stand out. Then, it is driving home messaging that shows consumers how to fit the products into their lives, and even their tightening spending plans.
Campbell Soup is more than 150 years old, and has seen plenty of difficult economic environments. It is also a different business today, and will continue to evolve. At the end of the day, continued execution is what’s required.
“If it's good food, people are going to buy it, especially if it's a great value,” Clouse said.
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