Optimistic retailers get the party started
Eighty-five per cent of BWS retailers expect trading this Christmas to be at least as good as last year, if not better.
Last Christmas beer, wines and spirits was one of the strongest divisions in retail, with sales up 3.2% (Nielsen, four weeks to January 2).
OLN polled hundreds of independent retailers and head office staff at multiples and found that the trade is anticipating another strong festive season.
Thirty-six per cent of retailers believe trading will be better than 2015, 49% feel it will be about the same and just 15% think it will be worse.
If they are right the category can look forward to another strong year of growth over the crucial Christmas trading period.
Tom Jones at the Whalley Wine Shop in Clitheroe said he is budgeting for a 5% rise in sales, while Nigel Pound at Totnes Wines in Devon believes trading will improve because shoppers are starting to appreciate better quality drinks.
Forty per cent of respondents said trading in 2016 has been better than 2015, despite the fallout from the Brexit vote, while 37% said it had been the same and 23% said it was worse.
Some retailers are aware that shoppers are a bit strapped for cash amid the uncertainty sparked by the Brexit vote, and are keen to give shoppers value for money.
Ana Sapungiu MW, buyer for Oddbins, told OLN: “Commercially people are more and more price conscious and I purposefully looked to bring in parcels for between £10 and £15.
“Given what’s happening in the market we need to be conscious of people’s money.
Compared to previous years we have to be a bit more careful.”
Even the royal family’s fine wine merchant, Berry Bros & Rudd, pledged to introduce wines people love but that “won’t bust the budget”.
Christmas is historically a time for trading shoppers up to more expensive bottles, but many retailers are also planning to use price promotions to drive footfall and boost sales.
This was the number one strategy mentioned by retailers when asked how they plan to ring in more business, ahead of gift packs, online marketing and multibuy deals.
“We won’t rely on price promotions heavily but there will be more of them this coming Christmas [than last year],”said Andrew Lundy, owner of Edinburgh chain Vino.
But retailers have been urged not to focus too heavily on discounts this Christmas.
“Spirits have been the real driver of growth in BWS in the past few years,” said Chris Ellis, commercial director at Pernod Ricard. “That has been driven by premium, it’s a real consumer trend and brands such as Absolut are able to trade people up.
“Last Christmas we witnessed a structural change in the market. Spirits grew not by premium but by deals on litres of standard spirits. That is bad news for consumers and for the trade, because it encourages value reduction into lower margin lines.
“We would encourage all retailers to focus less on driving those litre deals. Let’s go back to what we have previously been doing well – focusing on the premium options.”
Retailers large and small have bolstered their Old World ranges in the run-up to Christmas, while sparkling wine looks set to be another key battleground.
“Fifty per cent of Champagne is bought at Christmas and I don’t really expect to see that changing,” said Ed Betts, wine buying manager at Asda, which has frequently slashed the price of its exclusive-label Pierre Darcys Champagne to £10 or below for the festive season.
“Prosecco has had phenomenal growth but it is an everyday luxury. Champagne is huge. We aren’t going to lose our focus on it.”
Elizabeth Newman, BWS category manager at Sainsbury’s, said: “With the festivities and celebrations in mind, the Champagne and sparkling wine category continues to be an area of growth all year round, with sales of Prosecco alone up by around a quarter year on year.”
Last Christmas Sainsbury’s introduced a Pignoletto and this year it is championing a Crémant de Loire from Bouvet Ladubay in a bid to keep shoppers excited.