It's September why's the Christmas stuff on show?

Frustrating though it is to see Christmas lines on sale in late August and early September, it has to be that way for operational reasons. Here is a flavour from my experiences of what is going on behind the scenes over the whole Christmas period..

Christmas is the busiest time of the supermarket year and is more prolonged than any other event. There are different missions that are time dependent across the period including:

• Gifting cards and wraps

• Cake making

• Ambient Food Groceries peak

• Fresh Food Groceries peak

Cake making is done early due to the time it takes to make a Christmas cake. Gifts are bought and wrapped throughout the period. Cards can be affected by posting dates. Fresh foods has shorter product life, so is bought right at the end, where ambient foods can be bought in one big shop or across the period to spread the overall cost. This puts great pressure on the transport system to get the right volumes at the right time.

Supply side logistics

In short, it is not possible to deliver the entire Christmas requirement into supermarkets much later than September. There is so much volume to deliver, there would not be enough trucks, staff or drivers to deliver and store it.

Products coming from overseas must clear the docks when they arrive, to avoid bottlenecks. There is equally no distribution warehouse space to hold it either. Most supermarket depots run on the basis of clearing over 90% of the inbound stock daily.

Storing stock in lying out warehouses adds cost in the storing and eventual redistribution back into the network, so the reality is as soon as stock starts arriving in September it needs to flow through into the stores.

Store side impacts

Stores have tried to minimise disruption by creating a seasonal aisle to cater for as many events as possible through the year. Moving displays around is costly in terms of labour and impacts the day-to-day operation, so is of no benefit to store staff.

The year might start with January sale items being sold from the seasonal aisle until they sell through. The space is then reused for St. Valentine's Day, Mother's Day, Easter, then summer ranges and so on through the year in succession. Customers get used to this space as an event space.

These small events will be supported in aisle as well. As each event lands there will need to be some moving around, e.g. bold displays of champagne and flowers on St Valentine’s Day. These aisles can be supported with promotional plinths, shippers and other temporary merchandising units, minimising the impact on the regular display.

Christmas by contrast affects the whole store, from pickles to pet foods and frozen to fresh foods. The seasonal aisle alone cannot cope with these volumes, so is used for key lines and bulky lines like crackers, sweets and cards and gifting.

Promotional plinths at the end of the aisle are used for key grocery commodities like stuffings and sauces, mincemeat, marzipan etc. Bulk stocks of pallets are dotted around the store for items like Quality Street tins, beers and wines.

This is still not enough so every bit of spare space gets filled with impromptu displays of turkey tins, foil shippers, batteries and Christmas wrapping paper, (commonly at the tills).

The store warehouse fills up to a point where you can hardly move and the shop floor is as full as it can be, but it is still necessary to alter ranges and create more space for key lines in aisle leading to some lines being discontinued until January.

Ultimately the store is constrained by its four walls. Modern stores have also added new destinations within the same footprint of the store; bigger non-foods areas, third party concessions, and in the warehouse home delivery picking and despatch areas.

These not only take up shop floor AND warehouse space but add more Christmas ranges like Christmas jumpers and electricals including phones and games.

In the largest stores, the only way to manage the massive amount of stock arriving is to bring in 20 foot and 40 foot dry freight and refrigerated containers. These go in the back yard to hold things like milk and turkeys, kitchen towels and toilet rolls.

Finally added to this mix is the Christmas food ordering operation. Customer orders are aggregated by store. A special delivery of the entire customer order is sent in to each store for assembly by store colleagues into the individual customer orders, in time for the selected date of pick up by the customer.

Across the store, everything from soft drinks and pet foods sees uplifts and there is huge pressure on chillers and freezers too, so the aim has to be to get as much as possible on the shop floor as soon as it arrives.

Christmas timings

Broadly speaking, Christmas planning starts in October/November of the previous year. Strategy, recipes and products must be ready to be sent to suppliers from the end of February onwards.

Orders for products sourced overseas arrive at manufacturers in March with production running through to July and despatch due to arrive back in the UK in late August to early September, by which time Easter planning is well under way.

Marketing

Once stock arrives in store, there is a marketing opportunity to drive sales in the run up to Christmas.

Various events put Christmas front and centre in our minds, typically starting after the end of the summer holidays in early September and as people start to focus on winter.

Supermarkets sell these early events as "helping you spread the cost of Christmas". Common events to watch out for include:

• Toy sales. These are popular having the effect of driving early spend whilst locking sales out of a competitor.

• Christmas food adverts start in November, with the keynote John Lewis advert eagerly awaited. These start to showcase this year's range

• The press are invited to trade fairs where they get to see and test this year’s ranges, which then appear in press articles and social media.

Simply having the long-life products on show helps showcase the range and tempt you to buy those products now. It can also trigger a repeat sale on lines that get eaten early.

The event week

In Christmas week itself, all retail display rules go out the window, Fresh Produce is waterfall displayed, flowing down to the ground on lines like brussels sprouts, potatoes, clementines etc. to create a feel of abundance. The name of the game is to get everything onto the shop floor as you have only one chance to sell it!

Promotional plinths often become "manager's choice", allowing managers more freedom to create bold displays to push lines they have too much stock of.

From late November product ranges start to switch to post Christmas dates. Items like cheese with a long life go first. Shorter life lines like cream do not go post Christmas dated until the 19th December and Turkeys arrive from the 21st onwards. Store management have to ensure all the pre-Christmas dated stock gets sold through.

The major headache for stores is "coming out clean" after Christmas. The 23rd December is the busiest day of the year, but it moves every year so it might be on a Friday one year with the benefit of a full trading day, but when it falls on a Sunday you only have six hours trade, often 1000-1600, so trade splits over the 22nd and 23rd and possibly the 24th too.

It is difficult to tell how busy you will be on Christmas Eve and what you will get stuck with. I have seen a pallet board of Brussel sprouts turn up at 1600 on Christmas Eve and seen Christmas lines still selling through in March. We often have vans running product between stores

There is also the added complexity of online shopping. At least those orders come in advance, but the traffic increase on peak days affects delivery times and all the volume has to be picked in store. All of this and the store activity has to be "laboured up" to meet the demand, not forgetting the checkout operation either..

After the event

The period between Christmas and January is bleak as you try to clear the remaining stock. Sales are flat and the only way to clear stuff is through deep discounts. You start to see the elephants in the room, the lines you can't even give away.

The January sale stock arrives along with the last of the Christmas stock cluttering up the warehouse. The January Sale lines go on show from Christmas Eve onwards

Mid January, perishable lines in areas like ham and cheese and gammons starts to appear with short life causing unexpected losses which are especially high when expressed as a percentage of the flat sales. These are the Christmas lines that didn't clear or the low volume cheeses etc. which were either not Christmas favourites or where people traded up to other lines. To cap it all just after Christmas, the first Easter creme eggs arrive, starting the cycle over again.

Spare a thought for the store staff who have to manage all this movement and still keep the shop full and the checkouts going with smiling faces. Christmas is the season of back breaking work and long hours for Retail staff and management. The shop looks the most abundant, especially with the decorations and it feels really bare when it is over, but the show goes on.