A trade unhampered by slump: Britain's largest Christmas hamper producer is preparing for another season of growth, reports Chris Blackhurst

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The Independent Online
PETER JOHNSON is taking orders for next Christmas and knows already it will be good.

Mr Johnson is chairman and managing director of Park Foods, the Birkenhead-based group that controls 30 to 40 per cent of the Christmas hamper market. Forget the sumptuous wicker basket of the Harrods or Fortnum & Mason variety: Park's speciality is the cardboard carton of mostly basic groceries paid for in instalments throughout the year.

Some of its customers order the hampers from their milkmen, others get them through supermarket chains like Kwik Save. But the vast majority buy them from agents, either at their front door or at their place of work. The best-seller, the Savoy, contains 73 items, including Heinz baked beans, Maltesers, Uncle Ben's rice, Dolmio pasta sauce, Oxo cubes, Nescafe coffee, Heinz tomato ketchup and Ritz crackers. It costs either pounds 90 or pounds 2 a week for 45 weeks. An extra 50p a week brings an 8lb frozen turkey and a gammon joint.

The top of the range, the Complete Christmas, costs pounds 180 or pounds 4 a week for 45 weeks, and contains more of the same. Other packages comprise just sweets and chocolates, children's fizzy drinks, beer and wine, frozen food and meat.

Another, the Senior Citizen, contains 36 items, including tinned creamed rice pudding and mandarin oranges but not raspberry jam - 'the pips get stuck in the old folks' teeth', Mr Johnson says - and costs pounds 36 or 45 weeks at 80p.

The customers, in socio-economic speak, are firmly C1, C2, D and E. They cannot afford to spend much on groceries in one go but want a good Christmas.

Mr Johnson is not complaining: Park and its Country Hampers subsidiary will sell 1.5 million hampers this year. The company, which went public in 1983 with annual profits of pounds 1m, should make about pounds 9m in 1992. The stock market values Park at pounds 100m; Mr Johnson owns 70 per cent.

Nobody has Christmas off to such a fine art as the 53-year-old former butcher, whose main concession to fortune has been to buy his local football club, Tranmere Rovers. Mr Johnson has turned the simplest of products - the packing and distribution of a cardboard carton filled with groceries that anybody could buy in any food store - into a clinically efficient money-spinning operation.

The reason he knows now that next Christmas is going to be good is simple. The cartons are sold through 65,000 agents. - some go from door to door, most sell to friends and workmates. At this time of year his packers are frantically filling the cartons downstairs. Upstairs, office staff are receiving first responses to advertisements for agents. Experience has taught Mr Johnson that on average each agent will sell 11 hampers. Returns on the advertisements placed in the tabloid press and local free sheets show a rise in the number of people wanting to be agents. Barring unforeseen disaster, next Christmas is already cut and dried.

Planning for next December began in June, when Park Foods wrote to suppliers asking for indicative prices, their view of inflation in 1993 and a list of any products they wanted included. Once their replies came in, Mr Johnson and his planners sat down and drew up their hampers for 1993.

In August, the 1993 brochures and catalogues were printed. Two months ago, they launched the agents' advertising campaign. Next month, the first instalments on hampers for next Christmas will start to flood in. Park will hire 50 to 60 temporary staff to process the orders, which peak in March. 'There is a certain Wednesday every year, around Easter, when I know exactly how many we are going to sell. It used to be a case of me standing on a mail bag and feeling how thick it was through the soles of my feet. Now we have a computer model,' Mr Johnson said.

Next spring, his staff will start designing the boxes and working out how much cardboard they will need. Suppliers will begin sending in their tinned goods. At the beginning of September, 500 extra staff will start packing the 1.5 million boxes. The busiest period is November and December, when fresh produce such as turkeys and meats come in. The packers will fill 20,000 boxes a day, one every 1.5 seconds. While that is going on, Mr Johnson and his fellow executives will count the money and start advertising for agents for Christmas 1994.

Mr Johnson has spent 25 years honing his operation. In 1967, he was working for his father in the family butcher's business. He was in charge of the small cooked meat, sausages and pies factory.

'A man came in selling sausage skins and asked: 'Have you ever thought about doing a Christmas hamper?' I thought about it and realised it was brilliant.

'Within half an hour of him leaving I was at the printers. We put a poster up in our shops, 40 weeks at half a crown for a 10lb turkey or a leg of pork. We sold 600.'

The next year, the staff asked if they could sell the hampers themselves in the evenings on their local housing estates in return for commission. He agreed to put 10 per cent of the takings aside for their commission. In one fell swoop, Mr Johnson unwittingly achieved exactly the right target market, the agent system and level of commission.

His agents are still paid 10 per cent. The largest amount an agent earned last year was pounds 2,500 for selling 200 hampers worth pounds 25,000.

His ultimate aim is to persuade all 13.5 million households in the non-AB income brackets to take his hampers. At present, 3 million take hampers, either from Park or its smaller competitors led by Family Hampers, part of Great Universal Stores, and Farepak.

'All we need to do now is fine- tuning,' Mr Johnson said. 'We're recession-resilient and have good, steady growth, through 25 years of good times and bad times.'

The fine-tuning consists of covering all the angles. When an agent drops out or decides not to continue for another year, his or her customers - or 'members' as Park prefers to call them - will be contacted to see if they want to take the business on.

To ensure no cardboard is wasted and the boxes are packed as quickly as possible, the goods are fitted together in the carton and a template is drawn and passed on to the production line. There the packers - nearly all women - pack two or three items each, in the top right or bottom left or wherever the drawing decrees they must go, for pounds 2.80 an hour.

The 'fine-tuning' also consists of Jetlag, a subsidiary based in Chesterfield that puts together toiletries for airlines and an up- market stilton and port hamper operation. But they are small beer compared with the mass-market baked beans and tinned fruit variety. 'The luxury business gift and incentive market is very small,' Mr Johnson said. 'One Christmas, a company will give hampers; the next, it might give holidays or some other gift.'

Park agents also sell shopping vouchers for 4,000 high-street stores including Littlewoods, Dixons, Woolworths and BhS. The idea is the same as the hampers: customers pay instalments throughout the year. At Christmas they receive a voucher to use for their Christmas shopping or to give as a present. Another innovation, new next year, is jewellery.

Eventually, Mr Johnson promises, all Christmas shopping for those who cannot afford to rush out and spend on a whim in December will be done this way.

As to whether they pay much more for groceries they could buy in supermarkets, Mr Johnson says they do not. 'People like the idea of being able to fill their larder up and there is a psychological thing, that they think they are paying less.' Up-market hampers, he says, are different. 'You've got to remember with the luxury hamper recipient that he rarely pays for it. Ours have to be good value because they are used by the person who purchases it.'

His agents are now busy delivering their hampers, along with next year's catalogue, to their customers.

As for the sausage skin man, he died not so long ago. Mr Johnson had a letter from his brother congratulating him on his success. Mr Johnson responded the best way he knew: he sent him a hamper.

(Photograph omitted)