(Dec. 19, 2:20 p.m.) A full year into a recession, consumers are buying fewer fruit baskets for holiday gifts, but those not wanting to play the Grinch this season are trading down and buying smaller and cheaper fruit baskets.

Many fruit basket marketers agree overall sales are down as Christmas grows near.

“Demand is off, like everything else,” said Ben Roth, chief executive officer of Roth Produce Co., Columbus, Ohio. Bensoni’s Baskets is Roth Produce’s gift basket division.

“Last week was slow; this week is picking up,” he said Dec. 17. “I really can’t tell how much, but we’re off.”

Cincinnati-based Caruso Inc. had its busiest production period the same week. The company claims to be the largest pre-made fruit and gift basket packer and shipper in the U.S., according to its Web site.

“I do believe comparable sales this year will be down slightly from last year,” said Steve Caruso, executive vice president.

He said fruit and gift basket sales are running about the same as last year but the company picked up new customers and expanded its reach in to Canada to get those results.

Stephen Paul, founder and vice president of Bouquet of Fruits, Fresno, Calif., predicted a 30% to 40% drop in sales on larger baskets because consumers opted for smaller sizes. He said sales of smaller baskets were making that up and then some.

“We’re seeing a lot of people do a 6-pound sampler instead of an 8-pound basket,” Paul said. “There is a definite scaling back in terms of overall dollar value people want to pay.”

Paul said the company has been running promotions on its smaller baskets to prove to consumers that they’re all taking a hit because of the economy.

“We’ve got to show them we’re in it together,” Paul said.

Supermarkets are feeling the crunch, too. At Rice Epicurean Markets’ five stores in Houston, fruit basket sales have been a mixed bag, said Mark Luchak, vice president of produce and floral operations.

“We do a big job in fruit baskets, and we’ve had some that usually do fruit baskets just cancel,” Luchak said. “Their reason is the economy and that business is soft. We’ve also had some that haven’t done fruit baskets with us before come in this year and pick them up.”

Luchak said a significant number of consumers are buying smaller baskets this year.

“We’re seeing more sales of the smaller sizes,” he said. “They definitely are trading down. That’s exactly what we’re seeing from the customer. They still want to give, but because of the economy they’re trading down.”

Higher costs

Commodity prices are another factor cutting into margins for basket marketers.

“We saw a deflation of margin twofold,” Paul said. “All the fruit went up, but then we had to get aggressive with customer loyalty with promotions.”

Roth said apples, in particular, were high and probably won’t come down until after the first of the year.

“It’s all supply and demand, but unless weather gets involved prices will have to come down,” Paul said.

Luchak said Rice Epicurean Markets also would take a smaller margin on baskets this year because of input costs.

Shorter holiday season

The late Thanksgiving holiday this year, Nov. 27, led to a little bit of a crunch for items that see most of their sales between Thanksgiving and Dec. 24.

“Last year we had almost an extra week between Thanksgiving and Christmas,” Caruso said. “Not so this year, so we made adjustments.”

Caruso said the company produces and ships 65% of its baskets Dec. 10-21.

“We’re seeing a late rally,” Paul said. “Today’s probably the busiest phone day of the year, and it’s already Dec. 17. People are just realizing there are only eight days until Christmas.”

Luchak said last year, the two full weeks before the week of Christmas were both really busy. This year, the rush was just starting the week of Dec. 15, and he hoped it would continue to the next.

“With the week change, all it did was shorten everything,” Luchak said. “We lost a week of partying and get-togethers, so it definitely had a negative effect on business.”

Regardless of the challenges, fruit basket marketers agreed that there is still demand for the product and still fruit basket business.

Gift basket sales slide with the economy
Consumers are buying fewer fruit baskets for holiday gifts, but smaller and cheaper baskets are still selling.