Marketers may be Promoting Value for Valentine’s Day

As Valentine’s Day approaches, retailers will be promoting sweet treats to consumers. The candy category generally does well during specific holiday periods such as Halloween, Christmas, and Easter. Out of the 4 major ‘candy’ holidays, Valentine’s Day usually garners 16% of the annual holiday market compared to the 34% share of the industry's holiday revenues that are tied to Halloween.

But candy retailers may be feeling some pressure this year. The National Confectioner’s Association  foresees a negative trend for 2010 because Valentine’s Day falls on a Sunday. This follows negative spending in 2009 when candy sales dropped 9.4% for the holiday.

A survey by The Nielsen Company indicates there are categories that consumers favor even when finances are tight so candy marketers have reason for optimism.  Here’s how candy sales at food/​drug/​mass merchandiser stores broke out in the past year and the percentage change from the previous year:

  • Total candy sales: $10.6 billion (-3.4%)
  • Branded candy: $10.2 billion (-4.2%)
  • Private label candy:  $455 million +5.5%
  • Candy chocolate: $6.984 billion (-6.1%)
  • Brand chocolate: $6.894 billion (-6.3%)
  • Private label chocolate: $100 million +3.0%
  • Candy non-​chocolate: $3.682 billion 0%
  • Non-​chocolate branded: $3.3 billion (-1.1%)
  • Non-​chocolate private label $355 million +5.9%

Despite the small drop in revenue measured by Nielsen last year, candy remains a perennial favorite and the industry saw 6,000 new products come to market in 2008.  Keep in mind that the Nielsen numbers show only a portion of the entire $28 billion in confectionery product retail sales but they do show a trend.

Consumer behavior with respect to candy mirrors their behavior when shopping for other food items – a shift toward private labels. As the figures above indicate, sales of private label chocolate grew 3% while private label non-​chocolate grew 5.9%.

To counteract the general consumer sentiment and the negative effects of the Sunday holiday, look for marketers to promote gourmet value at everyday low prices during the upcoming Valentine’s Day holiday.

[Sources: National Confectioners Association; Candy Conflict, Facts, Figures & The Future, Nielsen, 2009] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.