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Christmas 2006 Retail Sales Summary

March 1, 2007

REVISED Christmas Season Sales Summary

IRI has restated Non-Chocolate Christmas Candy sales for the twelve week period ending December 31, 2006. Based on this restatement, NCA has revised projections for 2006 Christmas candy sales from a previously reported 3.1% decline to an increase of 1%.

Christmas confectionery sales grew 1% in 2006. NCA had previously reported a 3.1% decline in 2006 Christmas Confectionery sales but has revised these estimates based on a restatement of data by IRI. These estimates are based on IRI’s reporting of Chocolate Christmas Candy, Non-chocolate Christmas Candy, Gift Box Chocolates and other Chocolate Candies that skew highest during the Christmas sales period.

While 1% growth in confectionery sales for the season is much more positive than the decline, confectionery continues to face strong competition from gift cards and other gift items for the consumer’s Christmas shopping dollar.

Chocolate candy sales grew 1.6% while non-chocolate declined by 2.6%. Drug store chains showed a strong 6.6% increase. Supermarkets had a moderate increase of 1.6% while Mass Merchants excluding Wal-Mart declined 4.5%.

With the increase in Christmas candy sales, the confectionery industry finished 2006 with an increase reported for each of the four major holidays. Favorable dates, a strong economy, and strong merchandising by our retail partners created the four holiday sales increase for the first time in more than five years.

REVISED Retail Sales Summary
Christmas $ Percent Change vs. Year Ago (Food, Drug & Mass excluding Wal-Mart)

Distribution Channel
FD&M
Food
Drug
Mass
Candy Category
% Change
% Change
% Change
% Change
Total Candy
+1.0%
+1.6%
+6.6%
-4.5%
Chocolate Candy
+1.6%
+2.2%
+7.2%
-3.9%
Non-Chocolate Candy
-2.8%
-2.8%
+2.9%
-5.3%