Trade upbeat about Christmas prospects
Drinks retailers are feeling bullish about their chances of thriving during the upcoming Christmas trading period, according to our reader survey.
We polled hundreds of retailers and suppliers and found that 22% expect trading to be better than Christmas 2017, 61% think it will be the same and just 17% anticipate worse results.
Last Christmas BWS was the fastest growing FMCG category, with shoppers spending £3.9 billion on their festive tipples, £186 million more than last year (IRI, four weeks to January 6), so to match or better that performance would represent a strong result for the trade.
Christmas Eve fell on a Sunday last year, and several retailers said that it falling on a Monday this time around should benefit them.
Ted Sandbach, managing director at Oxford Wine Co, said: “It will be the second Christmas we have done in the central Oxford shop we opened in 2017. We have a great team in place, and that extra year of experience will see us in a very strong position.”
Seven in 10 retailers plan to use price promotions as a key strategy to drum up more business in the build-up to Christmas, but Aldi’s Mike James said that he would try for as long as possible not to get drawn into “silly, devaluing price promotions”.
The Co-op also plans to steer clear of the Christmas price wars that see swingeing cuts to beers, wines and spirits prices as the battle for footfall heats up. “I don’t really see the logic [in deep discounting],” said BWS trading manager Simon Cairns. “If we offer a fair retail price for a really good quality product year-round, then why crash value out of the category at a time of year when people really want a treat? I know that is a very different standpoint to some of our retail competitors.”
The drinks retailing trade is currently buoyant after an extended summer heatwave and England’s unexpected run to the World Cup semi-finals drove a huge rise in sales.
Thirty-nine per cent of retailers we surveyed said trading has been better this year than in 2017, while 38% said the same and 23% said worse.
Waitrose BWS head of buying Pierpaolo Petrassi MW said: “We continue to show strong outperformance versus the market in all areas of our wine portfolio. Our spirits range also continues to power ahead, especially gin, and our craft beer selection is going from strength to strength, supporting an already strong range of traditional ales.”
Cairns added: “Our grocer share of trade is about 6.3%, and our BWS share of trade is 9%, so it’s a really significant over-trade, and we are growing 7.7%. We have had a fantastic summer. It played to all our strengths.
“We couldn’t have traded any better if we’d tried. It really was optimal for us.”
Britain’s economy ground to a halt in August but quarterly growth hit 0.7%, boosted by demand for retail and food and drink during the heatwave, according to the Office for National Statistics.
Trading conditions remain tough, with exchange rates and Brexit representing major concerns for our readers, but Brits still seem keen to treat themselves to interesting beers, ciders, wines and spirits, with the off-trade being the big winner, and Christmas should see that trend persist.
“I am not going to lie, it’s not easy, but what’s reassuring is that when people come into our stores they are happy to look for something different,” said Oddbins’ head buyer Ana Sapungiu MW. “The average spend is probably maintained, but customers come in and expect more for that money, so we have to try extra hard to deliver for the price. But we can see it as a real opportunity to be bold and deliver for the price.”