Food prices unlikely to impact Easter spending, report

By Chris Jones

- Last updated on GMT

Related tags Marketing Cost

Higher prices for eggs - both real ones and those made from
chocolate - are unlikely to deter US shoppers from celebrating
Easter as they always have done, according to research from
Nielsen.

US retail sales of eggs are expected to top more than $95m during the Easter holiday week, according to the market research company, as families prepare for the traditional round of egg decorating with little regard for the extra costs. "Egg prices are projected to increase for the third consecutive year as retailers and consumers continue to struggle with higher commodity and energy costs,"​ said Todd Hale, senior vice president of consumer & shopper insights at Nielsen Consumer Panel Services. "While we would expect to see some decline in the number of egg cartons sold given price increases, we certainly don't see consumers widely cutting back on this food staple and Easter's egg decorating tradition." ​ Higher ingredient prices are also likely to push up the cost of chocolate eggs this Easter, but Nielsen's research suggests that consumers are unlikely to cut back on spending in this area either. This, the market research group suggests, is due in no small part to significant advertising expenditure by chocolate and candy groups during the Easter period, which is now more important in advertising terms than Halloween. Data from the National Retail Federation (NRF) confirms Nielsen's predictions. This year Easter Sunday falls on 23 April, making its the earliest Easter since 1913. This fact, NRF said, is unlikely to have any adverse impact on consumer spending, according to a survey carried out on its behalf by BIGresearch, with total Easter-related spending likely to be around $14.44bn - or $135.03 per person - in 2008. Of this, the majority ($59.21) will be spent on Easter food and candy, the survey showed. What remains to be seen is whether the recent trends towards premium and gourmet chocolate products will continue this Easter, despite higher prices. Easter sales have accounted for more than a quarter of America's gourmet chocolate sales in recent years, according to data from Packaged Facts, as shoppers have looked to give gifts that are perhaps perceived as more stylish and even healthier than traditional Easter chocolates and candies. But the higher cost of these products - chocolate with higher cocoa content, organic chocolate or brands with exotic flavors, for example - may prove their downfall this year as belts are inevitably tightened. As for manufacturers of chocolate products who regard Easter as one of the most profitable holidays of the year (along with Christmas and Valentine's Day), there are indications that are benefiting from the early season. Nestle said this week that it has seen a strong start to 2008. Part of this has been its strategy of rising prices quickly in line with raw material price increases, but the early Easter also allowed it to collect revenues for seasonal products in the first quarter.

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