Holiday spending to boost battery sales

The holiday season is the battery category’s best friend. A shift in the consumer electronics industry to built-in rechargeable batteries and the growth of do-it-all smartphones that replace many battery-operated devices has left the category in a slump. Total battery dollar sales across multi-outlets were down 3.5% to $2.7 billion for the 52 weeks ended Nov. 2, according to IRI data.

(To view the full category review, click here.)



While manufacturers adjust to the new normal, consumers continue to use batteries in remote controls, flashlights, smoke alarms, toys and games. Holiday toy sales, and a focus on promotionally priced multi-packs, drive the category this time of year.



“Holiday spending does positively impact sales of household batteries. Energizer’s Household Products division, for example, received 32% of its annual revenue during its first quarter of fiscal year 2013,” said Nick Cunningham, an analyst at The Freedonia Group Inc.



“We expect Duracell alkaline and larger-count pack sizes to perform best during the holiday season, consistent with the trends over the past few years,” said Duracell company spokesperson Win Sakdinan. The company puts more merchandising support — including displays and features — behind large-count packs during the holiday season than at any other time of year. Rayovac is promoting its large-count “Pro Packs” in convenient storage solutions for holiday 2014.



Promotional pricing remains important in the household battery industry. “It’s important even for the most sizable companies that already possess a large share of the market, especially in the primary (non-rechargeable alkaline and lithium) segment,” Cunningham said.



“This holiday season, consumers will see a very competitive pack couponing push [IRC – Instant Redeemable Coupons] as the big three national brands battle for shelf space,” said Harrison Smiddy, senior director of marketing at Rayovac. Energizer is giving consumers a chance to get up to $8 in Bunny Bucks via check or store voucher at select retailers with specially marked Bunny Bucks offer packages.



Duracell’s Sakdinan said the company will have “a steady drumbeat of coupons from Thanksgiving through Christmas via the Procter & Gamble brandsaver and Valassis FSIs.” Many will be high-value offer (more than $8) coupons on the purchase of the season’s hottest Hasbro toys and Duracell products. “This year, Duracell will offer a $10 off online rebate with a $30 purchase of participating P&G products through SavingStar.com,” Sakdinan said.



It may be the last time Duracell offers cross promotions with P&G brands since Warren Buffett’s Berkshire Hathaway Inc. is buying the Duracell battery business from the consumer products giant in a deal valued at approximately $3 billion. The deal was struck after P&G announced its intention to make Duracell a stand-alone business.



Energizer Holdings Inc. also has plans to split its operations into two publicly traded companies, one for batteries and other household products, and the other for personal care brands.