October 28, 2014
It’s not even Halloween but as you well know, retailers are already chomping at the bit to get the holiday shopping extravaganza underway. Businesses everywhere, food businesses included, are wondering what this holiday season holds and whether the season will be a feast or a famine.
In part, the answer to that may be very tightly tied to who your target market is. Overall, industry analysts are predicting that holiday sales this year will decrease from spending last year as flat wages and increased cost for things like housing and health care are putting more financial pressure on consumers. Companies like Wal-Mart have already cut their growth forecast blaming, in part, the flat economy.
However, when you dive a little deeper, you see that it’s not all doom and gloom. A report by PriceWaterhouseCoopers does indicate that sales overall will be down, dropping from an average spend of $735 per household on holiday gifts in 2013 to an estimated $684 this year. But it appears as though most of that cut in spending will come from families making less than $50,000 as that same report predicts that those households will spend an average of $377 this holiday season compared with $978 in households making more than $50,000 annually.
Since buyers of specialty food are – stereotypically – in higher-earning wage brackets, this seems to suggest that small food businesses may not be as directly impacted by a dip in holiday sales as other retailers. That being said, if you’re relying on a strong holiday season to boost your business’ economics, here are a few things you may want to consider:
- Are you clearly relaying your product’s *value* to consumers so that they feel that paying a higher price over a similar mass-manufactured product is worthwhile?
- It may be worthwhile to offer a limited-time holiday product at a lower price point if you’re concerned that shoppers may be turned off by your prices. This could include packaging your existing your products into smaller ‘stocking stuffer’ sizes that have correspondingly lower prices.
- With fewer sales dollars out there this holiday season, that means you’re not just competing with other food products but with holiday gifts of all types. What are you planning to do to help market your company and your product to consumers as *the* perfect holiday gift for their friends and family (or the perfect holiday splurge for themselves! Don’t forget about that angle too!).
I’d be interested to hear how the holidays pan out for your company this year or if you have any other thoughts on what small food business entrepreneurs can do to maximize their holiday sales.