Wine Report 2007: Introduction - values rise faster than volumes
Has the UK wine market turned a corner? For much of the recent past, Nielsen has been reporting just 2 per cent value growth in light wine – but for the year to May it creeps up to 4 per cent, ahead of inflation which was around 2.6 per cent in June.
Multiple grocers saw sales grow 5 per cent and co-ops and independents 9 per cent. Even better news is that sales growth outstrips volume rises of 2 per cent in both the total off-trade and the multiple grocers, which make up more than two-thirds of the market as a whole. Independents’ and co-ops’ volumes climbed 6 per cent.
The multiple specialists are still suffering – their volume and value sales dropped 7 per cent, and they now make up only 11.2 per cent of the off-trade as a whole.
But there is a silver lining: after being in freefall since 2004, price points in the specialist chains have rallied a little – climbing 3p to £4.74 after plunging 30p from £5.01 in June 2004 to £4.71 in May 2006. Thresher makes up the biggest chunk of the multiple specialist market tracked by Nielsen, and this small price rise has to be the result of it abandoning deep-cut price promotions in favour of three-for-two across the board.
The overall off-trade price of a bottle of wine climbed 10p to £3.97 in May this year – more than double the amount it has climbed over the past two years. The multiple grocers hiked prices up by 12p to £3.81, and co-ops and independents saw an 11p climb to £4.22.
Whether it means supermarkets are bowing to pressure not to discount, consumers are trading up, or duty increases are finally being passed on by those driving the market, these small rises are great news for the UK wine trade – so let’s hope they keep on climbing.