TWC Trends Autumn Edition 2021


TWC was recently asked by the FWD for our view on what the sector can expect for Christmas and beyond, so let me start with the same caveat that I gave on that webinar. Which is – it is almost impossible to predict what is going to happen from one month to the next at the moment, such is the pace and extent of change, so here I will share a round-up of a number of data sources, put into a wholesale market context, in a bid to fulfil this challenging brief.

Looking at the long-range economic forecast, expectations are that 2023 will be tough but there is hope that things may improve in 2024. An updated forecast from industry body IGD this week suggests that food inflation will continue to rise in the months ahead, peaking at 17% to 19% in Q1 2023, followed by a gradual decline.

A significant factor in the current high inflation we are experiencing is a lack of supply and unfortunately, we can expect this to continue due to the war in Ukraine and the ongoing implications of Brexit. Most recently we’ve seen this affect availability of eggs; and we’re also facing emerging challenges such as bird flu impacting the availability of our Christmas turkeys.

Many data sources suggest that consumers plan to spend less this Christmas and retail predictions indicate an anticipated decline of 3-4%. We know that people can’t help treating themselves, especially at Christmas time and so one of the ways consumers are managing this is to have started the planning earlier this year, as well as taking advantage of interest free credit and the likes of Klarna, to spread out the cost.

So, where are the opportunities in amongst all this doom and gloom? What we have seen in the past, and is proving true so far, is that convenience stores generally hold up well in recessions. “Little and often” shopping minimises waste and provided retailers have a strong value proposition, they can prosper in times of economic hardship.

Data from TWC data partner Mealtrak confirms that we are already seeing a slight drop in foodservice occasions and it is doubtless that the value end of the market will hold up better as consumers reduce spend on eating out. Operators across the spectrum will call on their entrepreneurial spirit and resilience, which has been necessary through the “permacrisis” of the last few years.

Data will be pivotal through 2023 – to track both consumer sentiment and sales reporting. Contact us to find out how we can help you stay on top of what’s happening and why. If you have a bespoke business question that you need to answer, take a look at our market research and consulting capabilities.

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