Christmas comes early for recession-hit public

Sainsbury's began dressing aisles with seasonal non-food products last week, while The Co-operative has begun placing festive-style chocolate and tree decorations at tills.

Waitrose plans to significantly increase its festive media spend from the £7.2m it laid out in the final quarter of 2008, according to The Nielsen Company. Having heavily promoted its Essential Waitrose range this year, the retailer will return to a premium focus. Last year's
TV campaign, created by incumbent MCBD, focused on journeys home for Christmas.

However, Nick Gray, managing director of retail marketing agency Live & Breathe, warns retailers to temper the level of early activity they run. 'If there is a small amount that acts as a teaser, then it works,' he says. 'But if it is larger than that, there is a danger of putting consumers off completely.'

Such concerns have not deterred Diageo from turning its focus to Christmas, two months earlier than in 2008.

A £5m campaign for Baileys and Baileys Flavours, entitled 'Give women their Saturday night back', is intended to fuel sales of the liqueur in the off-trade. The two-pronged TV activity will focus both on driving Christmas sales and supporting the launch of Baileys With a Hint of Coffee. Diageo says the strategy will result in 70% increased visibility for the brand, compared with 2008.

Baileys is heavily reliant on Christmas sales. Last year, in the 12 weeks to 29 December, 2.7m households purchased the spirit, equating to 23% growth year on year, according to The Nielsen Company.

The economic climate is not the only influence on brand and retail strategy, however. Gray points to changes in consumer habits. 'People's buying behaviour in the run-up to Christmas is different now,' he says. 'We are seeing a polarisation of those consumers that are the big planners and those that are "Christmas cliff-hangers", and rush about on Christmas Eve. As a result, brands have to focus on strategy much earlier.'

Moreover, in 2008, retail sales between October and December fell 2.7% compared with the previous year, according to the British Retail Consortium. Anthony Lucas, senior director and retail expert at professional services firm, Alvarez & Marsal, says: 'Brands are trying to gauge consumers' level of confidence and to predict what is going to happen, earlier this year.'

Loyalty cards
The unpredictable state of the economy makes forecasting sales for Christmas 2009 difficult, but experts agree that a sharp rise in loyalty-scheme points redemption is likely. 'There will be a significant increase this Christmas, and smarter retailers have already been pushing that area more,' says Lucas. 'They are focusing on holding on to customers and offering better rewards through loyalty schemes.'

John Sheekey, managing director at Nectar, has also noted a shift. 'We are certainly seeing consumers more incentive hungry, and of those who have joined Nectar in the past year, more than 50% say the recession was a factor in their decision,' he says. He expects consumers will find redeeming points to help with the cost of Christmas particularly attractive this year.

Not all retailers will be embarking on festive activity early, though. HMV, for example, is sticking to its usual  schedule of the second week of November. It will no doubt provide an interesting yardstick against which to measure the wisdom of an early Christmas start.