Cash-Strapped UK Shoppers Choose Chocolate Over Toys as Gifts

Nestle, the maker of Quality Street, and Mondelez, the owner of Cadbury, are experiencing increased sales of confectionery in the United Kingdom this holiday season.

Cash-strapped shoppers, looking for more affordable gifts, are turning to chocolate instead of expensive toys and gadgets, Reuters reported Monday (Dec. 11).

Despite price rises, chocolate remains relatively inexpensive compared to other gift options, according to the report. This shift in consumer behavior is driving the demand for confectionery products, benefiting companies like Nestle and Mondelez.

With inflation and higher mortgage rates impacting their budgets, U.K. shoppers are opting for cheaper gifts this year, the report said. The trend of trading down to more affordable options is particularly noticeable among Generation Z and millennial shoppers.

Nestle’s Quality Street and Mondelez’s Cadbury selection boxes, priced at £5 (about $6.25) and £1.50 (about $1.90) respectively, are among the preferred choices for shoppers, per the report.

In contrast, the average selling price of a toy in Europe is around £13 (about $16), according to the report.

To further encourage the purchase of confectionery products, retailers like Sainsbury’s and Tesco are offering discounts on popular chocolate brands to customers with loyalty cards, the report said.

In addition to affordable options, manufacturers are also introducing more premium chocolate products to cater to consumers willing to spend more, per the report.

These higher-priced products help mitigate the impact of rising cocoa prices, which have reached 46-year highs this year, the report said.

Despite the challenges posed by soaring cocoa costs, chocolate remains more resilient than other discretionary purchases, per the report. While consumers often review their discretionary spending during challenging times, they are less likely to reduce their spending on confectionery gifting.

Deciding to load up on chocolate and candy is largely an impulse buy, Abhishek Ahluwalia, global eCommerce director at Mondelez, told PYMNTS’ Karen Webster in an interview posted in November.

For Mondelez, which sees consumers buy these goods both online and in store, “the challenge is how we can create a virtual ‘hot zone’” that keeps the company in place as a category champion while driving revenues for the retailers, Ahluwalia said.