5 ways COVID uncertainty is shaping Christmas plans for food businesses

Despite being the height of summer, July is typically seen as a time for many food brands and retailers to begin promoting their Christmas offers to media outlets. But this year, ‘Christmas in July’ has been a slightly different affair.

While many businesses have simply been focusing on reopening their doors following the lift of restrictions, the ongoing uncertainty around COVID-19 and predictions of a second wave have left many business owners focusing purely on the present.

So with the future very much unknown, how might the pandemic change Christmas proceedings in 2020?

1 Shifting patterns
Customer behaviour has changed quite drastically over the last few months, as have the needs of customers, making it all the more difficult to predict what shoppers will actually want in a few months’ time. Will traditional Christmas products still prove popular in 2020? Will new trends like baking at home result in consumers seeking out different types of goods? Of course, it’s difficult to answer such questions, but it’s certainly worth businesses considering them, and monitoring trends to help inform their stock and sales strategy for the festive period.

We’ve also seen a huge shift to shopping online, and this trend is likely to continue. So whether or not another lockdown sets in, investing in the digital side of your business could open up a new sales channel that will prove invaluable, and instill more confidence in your business.

2 Supply and demand
When lockdown began, it revealed weaknesses in the food supply chain. On one end of the spectrum, a failure to keep up with demand saw supermarket shelves sitting empty for days, and yet farmers were faced with more produce than they knew what to do with, resulting in surplus fruit, veg and dairy products going to waste. The positive side of all of this was seeing the food community band together to support one another and keep the supply chain moving.

Shopping normally has certainly become easier since the onset of lockdown in March, and this will hopefully continue into Christmas. However, with consumers no doubt eager to ensure they can enjoy specific products for the holidays, Christmas could see another bout of panic buying that may cause further disruptions. For retailers, reaching out to local suppliers and farmers could ensure a smooth trade, whilst also helping growers and producers in your community to find a route to market.

3 The marketing message
Christmas is arguably the most competitive time of year, where many brands and businesses will ramp up their advertising spend. This year, however, coronavirus has no doubt impacted companies’ budgets.

As many bring their teams out of furlough and resume some sense of normal operation, there’s still an overall sense of uncertainty that may result in a slash in advertising. After all, it’s difficult to invest in Christmas campaigns for 4-5 months’ time when it’s not known what next week or month holds.

That said, even if another wave hits and lockdown is reinforced, Christmas certainly won’t be cancelled, and dedicating time and money to marketing can really help your business to stand out from the crowd. There are various free methods of marketing such as emails, newsletters and social media that will allow you to reach new customers and maintain communication with loyal ones. Setting aside a budget for marketing no matter how small – perhaps money you’ve been allocated as part of a loan – could help boost sales even further.

The question of how to frame messages this year is also a valid concern for many. Traditionally, Christmas campaigns are all about gathering together with friends and family to enjoy good food. Whether or not this will be the case this year remains to be seen, so it’s unsurprising that many businesses have been delaying their messaging as they wait to gauge the mood of the nation as well as any more changes that may come our way. It could be a good opportunity instead for retailers to focus their messaging efforts on different angles such as enjoying comforting treats at home and sending edible gifts to loved ones.

4 Financial concerns
Much in the same way that businesses have struggled, many consumers are also wary of their financial situation, with some people being laid off, taking pay cuts or simply feeling nervous about job security. This will no doubt lead to many consumers keeping an eye on their wallets as the Christmas season approaches.

Yet despite all of these uncertainties, insiders are actually predicting that consumers will still invest in luxury products this year. In fact, even during the 2008/2009 recession, Christmas spend was higher compared to the rest of that year. So we may see a lower spend compared to previous years, but it could still be an improvement from the rest of 2020.

It seems that people are still looking for that sense of escapism, and they could find comfort in holiday cheer as Christmas rolls around. It may be an opportunity for retailers to focus messaging on value for money, traditional comfort foods with provenance, and premium products that are seen as a treat.

5 Consumer confidence
Consumer confidence has been at an all-time low of late, and it’s perhaps not all that surprising. It’s likely a combination of various factors, from being nervous about the cleanliness of shops, to financial worries.

But these unpredictable times shouldn’t stop food and drink businesses and retailers from being creative during the season. Helping customers to feel safe and comfortable will help to increase consumer confidence, encouraging people to shop with you, whether that’s in-store if restrictions allow, or through online delivery and click-and-collect services.

Planning ahead could also help retailers to navigate what’s to come, setting your business up for any future scenarios such as another lockdown. By devising a strategy, whether that’s setting up the online arm of your business that you weren’t able to previously, or sorting out logistics for home delivery, you’ll be able to continue trading at a time when customers may need you most.

There’s no doubt that Christmas is going to be a bit different this year. However, despite all of the uncertainty around what the festive period will look like for food and drink businesses, there are still opportunities for retailers and brands to cater to customer needs and spread good cheer during these uncertain times.