Page last updated at 06:50 GMT, Monday, 24 August 2009 07:50 UK

A taste for treats in a recession

By Kevin Peachey
Consumer affairs reporter, BBC News

Paul A Young with chocolate
Paul A Young with his award-winning sea-salted caramel chocolate

It might be tough to live with a recession, but it seems that we cannot live without some of life's little luxuries.

Among the sales seeing an upturn during the economic downturn are shoes and chocolate.

Shoe shops and grocers were the only sectors to buck falling retail sales in July, according to the latest data from the CBI.

And consumers helped to lift Cadbury's UK sales by 12% in the first half of the year, as demand rose for bars of chocolate and bags of sweets.

Substitution

Evidence from previous recessions suggests that consumers substitute big outlays with smaller treats, according to retail expert Paul Buckley.

Charlize Theron in shoes
Shoe shops have seen a rise in interest, says the CBI

So out go expensive overseas holidays and in come big bars of milk chocolate or a new pair of heels, says Mr Buckley, a lecturer in marketing and consumer psychology at the University of Wales Institute.

He said that various supermarkets had played on this by promoting meals-at-home treats for prices below the cost of eating in a restaurant.

"People might trade up with food by treating themselves, but not costing them a fortune," he says.

"We might expect unemployment to rise for another year, so we can expect these offers to continue while the economic woes continue."

The challenge for retailers, he argues, comes as the country climbs out of recession. It takes confidence for retailers to push their prices back up and they might find it difficult to justify these higher prices in the short term, he says.

Hard at heel

It might not always go down well at home, but returning with a new pair of shoes might be easier to explain when a bargain is to be had.

People save money to buy gifts for anything from dinner parties to anniversaries
Paul A Young, chocolatier

The latest official inflation data, from the Office for National Statistics, shows that the average cost of footwear dropped by 1.3% in July compared with the previous month and fell 5.1% compared with July 2008.

This was in contrast to the Consumer Prices Index as a whole, which showed that the typical basket of goods rose in price over the year by 1.8%.

The CBI, which represents UK businesses, found that shoe shops' and supermarkets' High Street sales grew in July. This was a far more buoyant picture than the position reported by hardware and furniture stores, as well as booksellers and pharmacists. However, other retail measures have been more optimistic.

Meanwhile, Cadbury's said that it had benefited from the "stay-at-home culture" that led to consumers curling up on their sofa with a bar of chocolate.

Fearing a threat to the nation's health as a result, the Food Standards Agency is asking the industry to limit the size of bars of chocolate to 40g.

Luxuries

We are not just unwilling to cut back on treats for ourselves, but for friends and family too, according to award-winning chocolatier Paul A Young.

Paul A Young chocolates
Paul A Young says people are willing to pay for quality

He makes and sells high-quality, high-value products in two shops in London - typically charging £15 for a box of nine chocolates, including unusual ingredients such as sea-salted caramel and goat's cheese, lemon and rosemary.

He admits that orders from businesses buying gifts for their staff last Christmas were down, but otherwise trade remains relatively recession-proof.

Prices have risen, owing to the increased cost of sugar and cocoa in the last year - primarily because of the weakened pound. Yet he believes that shoppers are still willing to pay for quality for a special occasion - in the same way that they would pay more for a pair of shoes that last for a long time.

"It smells like a chocolate shop when you come in here. We make everything by hand," he says, surrounded by trays full of crafted chocolates.

"People save money to buy gifts for anything from dinner parties to anniversaries."

Credit crunch

Mr Young, the former head pastry chef for Marco Pierre White, says that marketing the high quality of his produce means that he will never offer anything at a discount.

Unlike some of the Michelin-star restaurants that are offering "credit-crunch lunches" during the downturn, he says he is not trying to get "bums on seats". He is concentrating instead on other forms of marketing and customer service.

Meanwhile, he is hoping for the dull and drizzly weather of September to April, which puts people in the mood to eat chocolate.

As he continues to create new types of chocolates and eventually hopes to expand the business to five shops in the UK, climbing out of recession would create an even sweeter taste.



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