The total confectionery market (excluding loose product and gum) recorded an annual sales on July 26 1998 of £3,649m, up 2% on the previous year and a level of greater marginally behind inflation.

Chocolate based products account for 77.4% of all value, with sugar based sweets at 22.6%. This trend has been growing over the last three years. Independently small retailers have maintained a strong share but this is being eroded by family shopping at multiples. Single pack items have reduced market share from 41.9% to 39.7% in the last year. This reflects purchasing of multiple packs with parents ....................... purchasing for children and increasingly being aware of safety.

The three largest manufacturers remain Cadbury/Trebor, Mars and Nestlé Rowntree - with a combined 72.3% of all value in 1998. This change in buying pattern would suggest less impulse buying. However, Jim Porteous at Nestlé (communications manager) maintains that 70% of confectionery is bought on impulse and uses the phrase 'within an arms reach of desire'.

Similarly, Phillippa Jean at Mars (trade relations) says : "people eating on the move and wanting things that are convenient to eat. They are cash rich and time poor. High profile, high impact marketing support, innovative promotions and new product launches will continue to drive and grow the categories they target and Mars has a strong record in these areas. TM owners of Forbouys Newsagents, has become the largest newspaper chain in the UK since paying £75m cash for Martin Retail (November 1998). The combined group will have 1,420 with turnover of £1bn. The group will retain the geographically district retail brands of Forbouys, Martins and RS McColl. According to James Lancaster, chairman and Chief executive of TM, it will make TM group a leading neighbourhood store operator. He also said that as many sites as possible would become convenience stores in the next 3-4 years in order to make better use of newsagency retail space and would also buy independent retailers.

200 outlets will be convenience stores at the outset. Sainsbury's opened their first local convenience store in July 1998. Safeway joined forces with BP in 1998 to develop a chain of mini supermarkets at 100 petrol stations. Budgens formed similar alliances with Q8 and Total. In the south-west symbol group Spar wholesaler Appleby Westward has a new partnership with CTN chain, Newspoint in which Newspoint will trade under the Spar banner on a franchised basis. Newspoint expect the chain to grow to 30 by the end of 1999 and 100 by 2004. New developments at Spar indicate the changes happening in the CTN / C-STORE sectors. Spar intends to develop ATM machines in another 70 stores with 30 already installed. They also intend to install Royal Mail post boxes in order to boost football and lead to higher sales of greetings cards and stamps (The local store in the ideal place for birthday card purchases representing 41% of the total greetings card market. Dundee based chain, Morning, Noon and Night has ATMs in 21 in stores and find that they boost sales by an average of 11%.

The largest turnover increases were said to be in confectionery, wines, beers and cigarettes. C.STORE chain Alldays is also installing ATM machines.

FUTURE TRENDS - 'BLUE SKY THINKING'

As tobacco and newspaper sales fall confectionery sales are lost to the multiples and C-STORES sell newspapers and non food lines, ATMs in C-STORES may provide an indication of future trends.

Tesco and Asda are leading the way in grocery multiples in pilot home shopping/home delivery schemes. Their high street C-STORE operations cater to CTN needs and 'top-ups', but we may see them evolve into ATM/Interactive service centres that generate football, provide a wide range of products to drive impulse buying, but in the process act a promotional tools for the large out of town stores.

ATM service centres may evolve into shopping on screen - especially in lines such as greetings cards videos and bulky non-food lines. 'Point of Purchase' design at the present time is seen as a cost effective alternative to media and is flourishing. Impulse and indulgence purchases will be further stimulated by on screen POP, national merchandising in conjunction with local news and advertising. In this way, home delivery will be generated from these products and served from local warehousing for rapid delivery.

The C-STORE sector is competitive, and so these outlets will essentially become brands in themselves, sensitive to the local situation and / or lifestyle trends. Given the tightening of planning for out of town stores, but get the continued reluctance of the public to leave the car, these needs may be met at the new generation of petrol stations. After all, there would be no real need to use a high street if all consumer needs are met in a grocery multiple or forecourt C-STORE. Children and those 55+ represent a non car-commute market and children represent substantial confectionery and magazine sales for the moment and in the future as young adults.

The new generation of high street CTN/C-STORE would be a familiar environment and an opportunity to promote brand loyalty to the store chains and products. Logistics Managers at a senior level have voiced concerns at supply chain problems and the need for automated warehousing and large investments in home shopping/delivery. However, this will be driven by the consumer who will be increasingly familiar with such screen generated non-shop shopping and is frustrated with congestion and parking. 1998 was the first year more computers than TVs were sold in the U.K. News Corporation are worried about the effect of this on newspaper sales, but more the effect is likely to have wider implications in the 'education' of the consumer.

CTN Retailers Overview and Future Trends ( 10 Jan 1998)

Overview During the recessions of the 1990's the CTN sector was relatively unaffected. General retail sales were depressed, but the CTN core product's of confectionery, tobacco and newspapers/magazines are not large ticket items that consumers feel they can do without. In the mid 1990's the CTN customer base was shrinking with the core products of tobacco and confectionery purchased by consumers aged 45+, the main consumers of tobacco and sweet confectionery. Tobacco sales are falling due to lifestyle changes and legislation by the current government (although this trend is slightly affected by increased teenage consumption).

However, children are a major sweet confectionery market and are more likely to buy personally from a CTN going to and from school. Although the numbers of younger children are in decline, this group may be an important market driver before and after they reach teenage years in that 78% of children's purchases made at CTNs. Confectionery sales to children continue to improve in line with the statistical increase in pocket money. Teenagers are major purchasers of magazines and are more likely than adult women to make their purchases at CTNs, even through they visit grocery multiples. Unlike adults, they are unlikely to use newstands on the way to work etc. CTNs and convenience stores have importance to younger teenagers as a source of snacks and drinks etc.

This market is being stimulated by manufacturers with new product ranges (see mints and chewing gum). The population projections for the older age groups show continued increases, however, they are more likely to buy caramels and fudges etc. at infrequent purchases. This group tends not to make such purchases at grocery multiples and instead have a loyalty to the CTN as one of the few remaining remnants of the specialist high street shop. The ageing UK population will contribute towards the survival of local outlets, which form backbone of sector. The total confectionery market (excluding loose product and gum) recorded annual sales on July 26 1998 of £3,649m, up 2% on the previous year and a level of greater marginally behind inflation. Chocolate based products account for 77.4% of all value, with sugar based sweets at 22.6%.

This trend has been growing over the last three years. Independent small retailers have maintained a strong share but this is being eroded by family shopping at multiples. Single pack items have reduced market share from 41.9% to 39.7% in the last year. This reflects purchasing of multiple packs with parents donor purchasing for children and increasingly being aware of the safety of unaccompanied children. This change in buying pattern would suggest less impulse buying. The three largest manufacturers remain Cadbury/Trebor, Mars and Nestlé Rowntree - with a combined 72.3% of all value in 1998. Jim Porteous at Nestlé (communications manager) maintains that 70% of confectionery is bought on impulse and uses the phrase 'within an arms reach of desire'. Similarly, Phillippa Jean at Mars (trade relations) says : 'people eating on the move and wanting things that are convenient to eat. They are cash rich and time poor.

High profile, high impact marketing support, innovative promotions and new product launches will continue to drive and grow the categories they target and Mars has a strong record in these areas'. There is a proliferation of magazine titles aimed at the teenage market. This trend builds on purchasing habits indicated earlier. The level and pattern of distribution is increasing and all retailers seek to broaden product offering. Widening diversity has had an immediate effect on consumer magazine sales because they are frequently impulse buys. This can only promote copy sales over the longer term. The negative side of copy sales is that newspaper sales continue to decline. Publishers have re-vamped titles in order to attract a younger readership but there groups have shown little interest, while at the same time older loyal buyers have been alienated. CTN sales of newspapers have been affected by the growth of convenience stores and petrol station forecourts offering newspapers.

The Monopolies and Mergers Commission of 1993 meant changes to the distribution practices by newspaper wholesalers (restricted to certain areas, clients and order levels). The report meant changes and competition (the recent company mergers in this sector including John Menzies retail by W H Smith News mean changes in the supply of newspapers see the players). W H Smith will control a major segment of retail and newspaper wholesale. CTNs have countered this trend by diversification and broadening product mix.

This challenge is dealt with most effectively on a day-to-day basis by independent retailers who realise they must adapt or die. Greetings cards are a successful part of the CTN product mix and this is a traditional part of the CTN environment unlike C-Stores who do not have the space to display a wide range of greetings cards and unlike specialist shops, both sectors do not have the storage for unsold stock post critical season (e.g. Christmas). The distinction between CTN and C-Store becomes ever more blurred. CTNs will have to take on a much stronger grocery element and opening hours will have to be extended to tap this market.

Sales of traditional CTN lines (tobacco and sweets) are being lost to the supermarkets but diversification into convenience markets will mean continued survival for many operators.

Until recently, fuel retailers were the least successful among convenience store operations, especially in creating a loyal customer base. However, this sector, catering for convenience craveaholics, top-ups and distress purchases, is burgeoning and major fuel retailers have entered into arrangements with grocery multiples to create what Phil Smith, Marketing Director of Somerfield calls 'the next generation of local community stores'. Somerfield and Elf are to invest £25m during 1999, opening 50 sites and creating 1,500 new jobs. The Somerfield petrol forecourt stores offer around 3,000 product lines, including fresh vegetables, meat and dairy products. Trials over the last two years have produced capital returns double the joint venture partners predictions. In the five existing test stores, 75% of all visitors are food only customers.

All major fuel retailers are seeking these arrangements with Tesco and Esso leading the way. Shell has a similar plan but has also opened its first high street convenience store. It is branded as Select; building on the brand established as the food sector of its forecourts. It is a 1,600 sq. ft, 24 hour store featuring food on the move (coffee, French bread sandwiches, hot dogs) with a seating area, a small seating area, a small ambient grocery section, a large fresh produce area and an off licence. The location of the Strand in London means that this is an atypical site. Select has the largest share (10%) of the £2.8bn UK forecourt trade, with more than 900 shops. Safeway joined forces with BP in 1998 to develop a chain of mini supermarkets at 100 petrol stations. Budgens formed similar alliances with Q8 and Total. The joint Tesco/Esso venture aims to establish a similar situation to Somerfield/Elf, to use Tesco ambient food expertise and logistics. Sainsbury's opened their first local convenience store in July 1998. Conversely, some retailers believe that non-food lines offer bigger than average margins and opportunity in impulse purchasing. 'Mace' believes that working with specialist suppliers such as 'Video Box Office' is the key to non-food success. They believe that siting in the store close to the off-licence area is important. This has implications for the CTN product mix, but the carded household 'hardware' lines that Mace carries are not impulse buys and demand space that the C-Stores offer. Mace reviews the stocking of non-food lines because they are harder to deal with - i.e. bigger and bulkier or fragile with limited shelf life eg flowers.

TM, owners of Forbouys Newsagents, has become the largest newspaper chain in the UK since paying £75m cash for Martin Retail (November 1998). The combined group will have 1,420 with turnover of £1bn. The group will retain the geographically district retail brands of Forbouys, Martins and RS McColl. According to James Lancaster, chairman and Chief executive of TM, it will make TM group a leading neighbourhood store operator. He also said that as many sites as possible would become convenience stores in the next 3-4 years in order to make better use of newsagency retail space and would also buy independent retailers. 200 outlets will be convenience stores at the outset. In the south-west symbol group Spar wholesaler Appleby

Westward has a new partnership with CTN chain, Newspoint in which Newspoint will trade under the Spar banner on a franchised basis. Newspoint expect the chain to grow to 30 by the end of 1999 and 100 by 2004. New developments at Spar indicate the changes happening in the CTN / C-Store sectors. Spar intends to develop ATM machines in another 70 stores with 30 already installed. They also intend to install Royal Mail post boxes in order to boost football and lead to higher sales of greetings cards and stamps (The local store is the ideal place for birthday card purchases representing 41% of the total greetings card market). Dundee based chain, Morning, Noon and Night has ATMs in 21 in stores and find that they boost sales by an average of 11%. The largest turnover increases were said to be in confectionery, wines, beers and cigarettes. C-Store chain Alldays is also installing ATM machines.

Future Trends

As tobacco and newspaper sales fall, confectionery sales are lost to the multiples and C-Stores sell newspapers and non food lines, ATMs in C-Stores may provide an indication of future trends. Tesco and Asda are leading the way in grocery multiples in pilot home shopping/home delivery schemes. Their high street C-Store operations cater to CTN needs and 'top-ups', but we may see them evolve into ATM/Interactive service centres that generate footfall, provide a wide range of products to drive impulse buying, but in the process act as promotional tools for the large out of town stores. ATM service centres may evolve into shopping on screen - especially in lines such as greetings cards videos and bulky non-food lines. 'Point of Purchase' design at the present time is seen as a cost effective alternative to media and is flourishing. Impulse and indulgence purchases will be further stimulated by on screen POP national merchandising in conjunction with local news and advertising. In this way, home delivery will be generated from these products and served from local warehousing for rapid delivery.

The C-Store sector is competitive, and so these outlets will essentially become brands in themselves, sensitive to the local situation and / or lifestyle trends. Such trends may develop regionally as the margin in consumer spending between north and south increases. Given the tightening of planning for out of town stores, but yet the continued reluctance of the public to leave the car, these needs may be met at the new generation of petrol stations. After all, there would be no real need to use a high street at all if consumer needs are met in a grocery multiple or forecourt C-Store. Children and those 55+ represent a non car-commute market and children represent substantial confectionery and magazine sales for the moment and in the future as young adults. The new generation of high street CTN/C-Store would be a familiar environment and an opportunity to promote brand loyalty to the store chains and products.

Logistics Managers at a senior level have voiced concerns at supply chain problems and the need for automated warehousing and large investments in home shopping/delivery etc.. However, this will be driven by the consumer who will be increasingly familiar with such screen generated non-shop shopping and is frustrated with congestion and parking. 1998 was the first year more computers than TVs were sold in the U.K. News Corporation are worried about the effect of this on newspaper sales and television ratings but this is likely to have wider implications in the 'education' of the consumer shopping/lifestyle habits.

CTNs

The CTN sub-sector, despite its fragmentation and the intensifying competition from convenience stores, petrol forecourt shops and other retailers with extended opening hours, has proved to be particularly resilient. Numbers of outlets were virtually the same in 1992 as in 1982 (48,554 compared to 48,227). The CTN sub-sector is no longer monitored separately in the official retail statistics but its sales are unlikely to have changed significantly from the £10,060 mn recorded in 1994. Smoking is in decline, while c-stores and supermarkets are continually gnawing at the CTNs' market share, as have changes in newspaper distribution which have extended the number of non-CTN outlets selling news.

The National Lottery will have had a beneficial impact, but only on those operators, mainly the large multiples, which do sell tickets. As a result, the staying power of the independents will come under increasing challenge. The top 17 multiple chains in this year's rankings recorded collective sales in 1994/95 of £1,538 mn from 3,856 shops. There has been some rationalisation in the sub-sector in recent years, with T & S acquiring Gibbs News, Macs Supermarkets and Paper Chain in 1994/95 and Martin Retail buying Clark Retail in mid-1995. Additionally, Gllaher has withdrawn from CTN retailing, selling its high street operations to management. It should be noted that for statistical purposes W.H. Smith and John Menzies are considered to be mixed goods retailers rather than CTNs, although they are responsible for substantial sales of CTN products, especially newspapers. Confectionery, tobacco and newspapers make up around 85 per cent of CTN retailers' sales, but many are currently diversifying into other product ranges and into convenience store retailing. The leading groups include mainly generalists, although there are some specialists, e.g. Thorntons (confectionery).

CONVENIENCE STORES

Since 1991, the Scottish-based wholesaler, Watson & Philip, has been making a concerted and successful effort to become a major force in specialist convenience store retailing. It has taken the acquisition route, buying Alldays in 1991, Central Convenience Stores in 1992 and, most significantly, Circle 'K' in early 1993. This was followed by the takeover of Circle C at the end of 1994. It is now the single biggest UK operator with 1994/95 sales of £244 mn; all outlets trade under the Alldays fascia. T & S Stores has also been expanding its Dillons c-store division, this achieving sales of £141 mn from 207 outlets in 1995, while the (now) third largest specialist, M & W, has added over 50 shops since 1991 taking its turnover to £107.6 mn in 1994/95. Several wholesalers have developed convenience store chains, this process being accelerated by the purchase of 123 Lo Cost stores from Argyll in 1994 by a consortium led by the Midlands-based wholesale group, A.F. Blakemore & Son. This company had earlier absorbed the Lateshopper c-store operation acquired from Kwik Save in the same year. By 1996, it was trading from 152 stores and in 1994/95 had group sales of £397.1 mn. Others in the consortium were Appleby Westward (19 shops), James Hall (78), Capper (67) and Alfred Jones. Full details of these companies' retailing operations are not yet available for inclusion in The Retail Rankings but their addresses have been presented in the appropriate section. The same applies to the Dundee wholesaler, C.J. Land & Son, which has 33 company-owned (8 spar and 25 Freshways) stores in Scotland.

Apart from the specialists, a substantial number of other retailers has moved into the field of convenience store trading. The co-ops and the voluntary groups (e.g. Spar, Londis, Mace, etc) have covered many of their outlets to a convenience format, for instance. (Several of the multiples included in the rankings are also affiliated to voluntary groups - R.C. Dowman and Morning Noon & Night to Mace, for example and Dawn Til Dusk to Costcutter.) Similarly, CTN multiple operators such as Forbuoys, Martins, Portsmouth & Sunderland Newspapers and the Bristol Evening Post, have converted some or all of their traditional outlets to fully-fledged convenience stores.

All the major petrol station operators have forecourt shops, most of which increasingly merit classification as dedicated convenience stores. All the major petrol station operators have forecourt shops, most of which increasingly merit classification as dedicated convenience stores, collectively accounting for an estimated £2.9 bn worth of sales (including National Lottery transactions) in 1995. The leading forecourt shops operations are Esso (1,930), Shell (1,578), BP (1,320) and Texaco (1,220). Detailed reports on Forecourt Shops in the UK and Convenience Stores in the UK have been published by Corporate Intelligence on Retailing in 1996. Pre-tax profit margins appear to be universally low amongst the leading convenience store chains, but most did trade profitably in 1993/94 and 1994/95.

All other manufacturers including multinationals such as Mars and Kraft Jacobs Suchard have less than 5% each.

DISTRIBUTION

Distribution is wide with CTNs and supermarkets being important outlets.

CHILDREN ARE KEY PURCHASERS from CTNs and men buy from CTNs rather than SUPERMARKETS. Women tend to buy from supermarkets when shopping for the family. Other outlets inlcude petrol station forecourts, off-licences and vending machines - these supply impulse items.

MINTELS REPORTS show that 3/4 of all adults purchase sugar conp - BUT most consumers reason is occasional treat. Consumers who buy for themselves tend to be teenage or old age customers.

MINTEL FORECAST GROWTH SET TO CONTINUE - 18% IN REAL TERMS DURING 1998-2002 - a higher rate of growth than that experienced in the review period for this report, 1993-98 POCKET MONEY is forecast to increase by 16% over same period and the number of 15-24s (heavy consumption) in most sections of this market is set to grow by 3.6%, providing a natural expansion of existing consumer base. MARKET DRIVERS See introduction paragraphs, polarisation plus:- traditional sweets such as toffees, fudge and caramel were popular with over 45s. Under 4 in 10 purchases are for eating immediately by purchasers - women building families are key purchasers - BUT tend to but for others - children.. In targeting consumers it is necessary to reach both the purchaser and consumer of sugar comp.

CHILDREN - PRIME CONSUMERS - HAVE SUBSTANTIAL INFLUENCE ON MARKET. TRENDS IN UK POPULATION BY AGE GROUP DURING PERIOD 1993 - 1998 AGE GROUP 1993 1998 (est) % CHANGE 000 % 000 % 93-98 0?4 3,827 6.6 3,677 6.2 -3.9 5-9 3,772 6.5 3,905 6.6 +3.5 10-14 3,645 6.3 3,795 4.1 +4.1 15-24 7,737 13.3 7195 12.2 -7.0 25-34 9,283 16.0 9154 15.5 -1.4 35-44 7,784 13.4 8492 14.4 +9.1 45-54 7,112 12.2 7,755 13.1 +9.0 55-64 5,790 10.0 5,871 9.9 +1.4 65+ 9,166 15.8 9.241 15.6 +0.8 TOTAL 58,116 100.0 59,085 100.0 +1.7

FIG 1.

SUGAR CONF. grown ahead of average household disposable income since 1990 and apart from 1995 when total sales were same as 1994 - the gap has widened. SUGAR CONF. IS A DISCRETIONARY PURCHASE so is not independant of PDI, SEE INTRO PARA.

HOWEVER, if market is examined from base year for this report - 1993, value sales of sugar conf. have not kept pace with growth in disposable incomeor consumer expenditure, although the market has shown ssame pattern of growth. FIG 2. illustrates that market growth has fallen slightly behind growth in PDI and consumer expenditure as the economy has become more dynamic, but still represents a creditable performance.

YEAR PDI at 1993 prices Consumer Expenditure at 1993 prices £bn index £bn index 1993 459.23 100.0 406.57 100.0 1994 466.60 101.6 417.87 102.8 1995 481.55 104.9 425.12 104.6 1996 499.44 108.8 439.83 108.2 1997 517.66 112.7 459.63 113.1 1998(est) 533.19 116.1 474.34 116.7 FIG 2. - PDI and consumer expenditure at constant prices 1993 - 1998 FIG 2. sets out growth in consumer expenditure against value growth in the sugar conf. market, deflated to 1993 values and the volume growth in the sugar conf. market for period under review. Sweets are relatively low unit packed items, and therefore, when money is short they may be a substitute for other more expensive confectionary and deserts. However, a higher disposal income allows consumer to chose from a wider variety of products and as can be seen in FIG 2A if sugar conf. is part of their 'occasional PURCHASE repertoire, it may become a more frequent purchase during good times.

LOOK UP MINTER OCT 98 'FOOD & DRINK' FOR DESCRIPTIONS OF CONFECTIONARY COMPANIES. - ALSO - FOR DETAILS OF HOW MUCH CONSUMERS CONSUME - CHEWING GUM ETC. - and WHERE THEY BUY IT. I WILL HAVE TO INDICATE OTHER SUPPLIERS OF FOODS AS WELL AS MAJOR CHAINS.

Multiple grocers have substantially increased share of market - now account for 1/4 of value sales, largely at 'expense' of other outlets. 1995 1997 % CHANGE IN REAL TERMS £M % £M % MULTIPLE GROCERS 266 19.0 419 255.5 +49.2 INDEPENDANT CTNs 266 19.0 287 17.5 +2.2 MULTIPLE STNs 168 12.0 191 11.1 +7.7 INDEPENDENT GROCERS 140 10.0 159 9.7 +7.6 PETROL STATIONS 126 9.0 154 9.4 +15.7 VARIETY/DEPT STORES 126 9.0 136 8.3 +2.2 CO-OPS 42 3.0 44 2.7 -0.1 OTHERS 264 18.9 251 15.3 -10.0 TOTAL 1,398 100.0 1,641 100.0 +11.2 FIG 12 - CHANGES IN DISTRIBUTION BETWEEN 1995-97

KIDS AT THE CTN

Parents buy sweets as treats for children at supermarkets, children themselves are more likely to buy from a local CTN, which thay may visit on the way to or from school.

YOUNG ADULTS ALSO purchase from CTNs as well as petrol station forecourts, off licences and vending machines - all may be more convenient for young people. Chewing gum has risen by 5.6% points with 41% adult purchases. Toffee and caramels bought by around a third of adults. %1993 %1994 %1995 %1996 %1997 %1998 POINT % CHANGE MINTS 66.1 66.1 65.7 66.4 66.3 64.6 -1.5 SWEETS IN TUBES FOR CHILDREN 65.7 64.4 62.1 62.1 63.1 62.4 -3.3 CHEWING GUM 35.4 37.5 38.5 38.8 39.6 41.0 +5.6 TOFFEES & CARAMELS 33.8 34.8 34.0 34.5 34.4 33.4 -0.4 FIG 13 - ADULTS Same TGI, BMRB 1993-98/MINTEL. 1993 Base Year. KEY PURCHASERS - SOCIO ECONOMIC GROUP D. 3/4 of 15-24 buy gum. UNDER a 1/4 of those over 55 do so. CHECK MINTEL FOR TYPES OF CONSUMER MINTEL REPORT FOR CTNs RETAILERS 15 AUG 1997.

THE FUTURE (8.43) DEMOGRAPHIC SHIFTS Given the strong growth of sugar confectionery, despit less than positive market drivers, it is extremely difficult to predict future prospects for this market. The number of children is a crucial factor and the projected fall in numbers of children aged under ten between 1998 and 2002 (Fig 20) will have an effect on demand for lines which are exclusively aimed at children. At the other end of the age spectrum, a rise in the number of older people chould assist market growth of products favoured by these groups, such as toffees, caramels and fudge.

HOWEVER, there tends to be relatively infrequent purchasers, so market growth in unlikely to be substantial.

AGE 1993 1998(est) 2002 %CHANGE %CHANGE 000's 000 % 000 % 000 % 93-02 98-02 0-4 3,827 6.6 3,677 6.2 3,562 6.0 -6.9 -3.1 5-9 3,772 6.5 3,905 6.6 3,718 6.2 -1.4 -4.8 10-14 3,645 6.3 3,795 6.4 3,945 6.6 +8.2 +4.0 15-24 7,737 13.3 7,195 12.2 7,451 12.5 -3.7 +3.6 25-34 9,283 16.0 9,154 15.5 8,130 13.6 -12.4 -11.2 35-44 7,784 13.4 8,492 14.4 9,257 15.5 +18.9 +9.0 45-54 7,112 12.2 7,755 13.1 7,726 13.0 +8.6 -0.4 55-64 5,790 10.0 5,871 9.9 6,530 11.0 +12.8 +11.2 65+ 9,166 15.8 9,241 15.6 9,260 15.6 +1.1 +0.3 TOTALS 58,116 100.0 59,085 100.0 59,587 100.0 +2.5 +0.8 FIG 20 -

UK POPULATION PROJECTIONS BY AGE GROUP 1993 - 2002

FUTURE - ???? IMPACT - CTNs tended to retail 'penny sweets' for children in open boxes, the greater competition forces many to redesign shop interiors and improve displays. Sweets have benefitted with hygenic PICK'N'MIX units, attractive to children. Greater number of confectionery mixed bags available on hanging display - taking up minimum room - but maximum impact. ALSO - on-counter displays of sweets in tubes - well thought out.

IN SUPERMARKETS - dedicated 'sweetie racks' have taken place of limited check out confectionery units, encouraging children to view and browse and persude parents to add a packet (or multipack) to the shopping trolley. Sugar conf. will become increasingly reliant on older adults, unless those in their twenties and thirties and forties can be drawn into the market to buy for themselves (rather than their children) in greater numbers and with greater frequency - the challenge for the future.

FORECAST While children are important to the sector, the market encompasses all number of products which appeal to a wide spectrum of the population. While it is likely that households with children are more likely to buy some products, it is not true for allareas. However, such is the size of the market - children's actual expenditure can be somewhat dwarfed by that of adults. -

PAST TRENDS HAVE NOT FOLLOWED the numbers of childrenaged 5-14. There does seem to be a statistical link with amount of children's pocket money - underlines the aspect that IT IS THE AMOUNTS spent by conf. buyers, RATHER THAN NUMBERS, which is influential.

CHILDRENS POCKET MONEY IS A FACTOR. There is a youth bias among buyers of most product areas.

SUGAR CONF. MARKET IS 314,000 tonnes - equivalent to around 100 gm per week per capita - so market could be regarded as mature. Long term trends in volume sales suggest that this is the case. On 1998 consumption was 98 gm per capita per week. Suppliers are now concentrating on adding value and stimulating demand by new product introductions

PART OF THE SUCCESS OF SUCH A HIGH STRATEGY DEPENDS ON THE ABILITY OF CONSUMERS TO PAY MORE, AS IS REFLECTED IN THE HIGH CORRELATION BETWEEN PDI & PAST SALES - as a result - airing these factors - the following forecast. £bn Index 1998 1.72 100 1999 1.81 105 2000 1.88 109 2001 1.95 113 2002 2.04 118

FIG 21. - FORECAST OF THE UK MARKET FOR SUGAR CONF. 1998 - 2002 ALTHOUGH MATURE - MINTEL FORECAST A GROWTH OF 18% IN REAL TERMS IN THE FUTURE. THIS IS DOUBLE RATE RECORDED for period 1994-98. To some extent this is due to the fact that numbers of 15-24 are set to increase by 3.6% after 1994 after years of quite large falls. However, this will be compensated by the decline in the number of 25-34 year olds and the slowdoen decreases in PDI.