Christmas, the crucial end-of-year trading window, is over and many of the UK’s major retailers this week (8 January) revealed how they performed. All jostled for attention and sales in the run up to the big day by with costly marketing campaigns. But did ad investment translate into healthy profits or was there more at play during Christmas 2017?
While Aldi drummed up the most social media engagement with its lovelorn carrot mascot Kevin, emotional tracking of TV viewers pegged the most effective ad as Coca Cola's Holidays are Coming. M&S' Paddington and the Christmas Visitor was the highest ranked retailer in fourth behind Vodafone and McDonald's. John Lewis's Mog the Monster featured the most Shazamed soundtrak over the period. John Lewis' ad got the most views on YouTube.
Stressing just how important it was for brands not to disappoint on the marketing front, research from the Advertising Association suggested that 33% of the UK public was more excited for the flagship ads than the festive movie slate that includes Star Wars: The Last Jedi.
How did the retailers perform and did marketing influence the results?
Tesco saw sales growth to the tune of 1.9%, though it was a percentage point lower that was projected by analysts.
During Christmas, the company delivered its biggest ever week of sales, with own brands among the standout performers. Fresh food outperformed expectations by 4% during this window too.
In its marketing, Tesco explored the human moments that occur during the preparation of the hallowed Christmas turkey. It came under fire from some parties for its inclusivity, briefly showing a Muslim family exchanging gifts.
Sainsbury's, the UK's second biggest supermarket chain behind Tesco, saw total retail sales rise by 1.2%, groceries were up by 2.3%.
Mike Coupe, group chief executive officer, underlined the growth of the online section and how the Argos merger had paid dividends, driving footfall to stores. He said: "We had a strong Christmas week, with record sales, over 340,000 online grocery orders and stellar growth in Argos Fast Track delivery and collection."
Online sales accounted for 20% of the group’s sales in the 15 weeks leading to January.
On the marketing front, Sainsbury's went a bit left field with a catchy singalong, littered with some celeb appearances as part of its #everybitofChristmas campaign.
Morrisons, distinguished itself by touting its 'Free-from' range in its Christmas marketing push, targeting fussy eaters and those with select dietary requirements.
The UK's fourth largest supermarket reported like for like growth was up 2.8% with chief executive David Potts saying the “strong value for money” message in its ads had gone down well with customers.
Marks & Spencer (M&S)’s festive push saw it run with heartwarming creative that tied up with Paddington Bear in time for his second cinematic outing. However, the positive feedback to this ad did not necessarily balance the books in store.
Steve Rowe, chief executive of M&S, said “tighter budgets” bit into food and clothing sales, a trend that has hindered the retailer throughout the year. Like-for-like clothing and homewares sales at the were down 2.8% while, food halls were down 0.4%.
House of Fraser shifted its marketing over Christmas with a campaign, 'Bring Merry Back', showing how its wares helped two sisters bond throughout the decades. But the ad investment wasn’t enough to counteract a sales drop year on year of 2.9% in the six weeks leading to Christmas
John Lewis is annually the biggest UK Christmas advertiser with arguably the most anticipated slot, a position it has built up with years of top Christmas ads.
Sir Charlie Mayfield, chairman of the John Lewis Partnership, the “inspiring Christmas proposition, innovative product assortment and competitive position on price helped us to build sales momentum across the period” and helped propel gross sales up by 2.5%.
From the discounter perspective, Aldi seized £10bn in sales for the first time in 2018, with December sales up 15% largely fueled by premium goods.
The marketing had a lot to answer for; Kevin the Carrot made a return, traversing a table of sumptuous fare to be with a new romantic interest in Katie.
Matthew Barnes, chief executive of Aldi said it was the retailer’s busiest ever Christmas as “millions of festive shoppers switched to Aldi from more expensive food retailers”.
Rob Sellers, managing director of Grey Shopper, said it is difficult to pick out winning and losing campaigns as there are "so many big disruptive factors at play in the retail sector at the moment.
"When times are been tough, consumers are known to put off spending on big ticket items, but compensate emotionally with indulgent food and drink," he said, explaining the positive results Aldi, Morrisons and Tesco all saw from increased food sales.
Sellers also drew attention to the elephant in the retail room, Amazon. It ran the 'Give a Little Bit' campaign that looked to underline the ease with which shoppers can get what they need via the mobile app. It followed a singing package's journey through the Amazon warehouse to a grateful recipient.
Sellers said: "The other thing that can’t be disregarded is the performance of Amazon over the Christmas period – which is as yet unknown. Every single retailer will be seeing Amazon as a threat, regardless whether they are currently a direct competitor.
"All of these retailers’ figures need to be seen in the context of the Amazon juggernaut – and given that they are still relatively small players in food and drink, that might be another reason that traditional grocers have performed well on the whole, but retailers in other sectors have struggled."