Early data points to healthy Christmas trading period

Supermarkets enjoyed a strong Christmas trading period as they grew BWS sales by 1% to £2.3 billion (IRI, seven weeks to January 3, 2015).

The analysts are still crunching the numbers for the wider off-trade, with the results due towards the end of the month.

But OLN has spoken to a host of independents reporting strong sales growth, and indications are positive based on the grocers’ performance.

The 1% growth in BWS contrasts with a 0.2% decline in overall grocery sales at the multiples.

Beer and cider was down 0.2%, but wine sales rose 0.5% and the spirits category was the star performer, with sales up 2.8% to £730 million.

Toby Magill, head of BWS for IRI, told OLN: “Wine has been the sector shoppers have spent most on, accounting for £1 billion worth of sales – 43% of alcohol value.

“However the market sector to post meaningful growth has been spirits, suggesting shoppers this year were willing to treat themselves to a more indulgent and premium festive period in terms of their Christmas tipple.”

Majestic reported a like-for-like sales growth of 1.1% during the 10 weeks to January 5, but margins took a hit as it invested 50 basis points of gross margin to remain competitive over Christmas as aggressive promotions from the multiples kicked in.

But independents were buoyant. John Hodges, owner of The Vineyard in Dorking, Surrey, said the business had seen double-digit growth compared with Christmas 2013.

“Retail and wholesale were both strong,” he said. “There were good strong sales across the board. We sold a lot of Bordeaux and classics like Marlborough Sauvignon and white Burgundy. There has been a lot of talk about Prosecco but Champagne did really well, including some prestige cuvées.”

Hodes added that he was optimistic about the year ahead. “Things feel good,” he said. “On the retail front a lot of people are coming back into the town after a Waitrose reopened which had been closed for 14 months. It’s also bringing in people from nearby towns. We’ve got some new accounts coming on board on the wholesale side and retail is feeling very buoyant.”

Cheshire-based independent chain Corks Out said sales were up 26% in December compared to the previous year, and that margins rose 2.5%. It added that web sales grew 200% and spirits sales were up 55%.

John Mitchells, at Mitchells Wine in Sheffield, said total sales for December had come in £200 up on the same month in 2013. “The previous year was exceptional so we’re very pleased with that,” he added.

“We sold 470 mini-kegs of beer at £20 each which was marvellous. Local and other British bottled beers did really well because the supermarkets haven’t got an angle on them. We also sold a lot of gin.

“We sold more wine at £10.99-15 than we did at £6.99-8.99. French wine does really well at Christmas and we sold a lot of claret and Chablis.”

But he added that Champagne had been a “shambles” compared to rival sparkling wines.

Mitchell said he was optimistic for the year ahead. “The important thing is we’re growing margins from years ago when it was stack it high, sell it cheap. It’s all about good service, product knowledge and premium products.”

Multiples reported surging sales of sparkling wine, with Prosecco once again a big winner during the festive period.

Andrew Mann, customer director at The Co-operative Group, said: “As a leading convenience retailer we’ve seen a shift in consumer habits and Prosecco has fast become the nation’s favourite drink with which to mark an occasion or celebrate. It has even outsold milk [over Christmas].”

Marks & Spencer said Prosecco sales were up 45% on the previous Christmas. Wine buyer Dror Nativ said: “The ongoing Prosecco boom has of course been fuelled by the affordability and approachability of this wine, but what is most interesting is the new for enjoying Prosecco as an everyday drink rather than solely on celebratory occasions.

“Our customers are enjoying Prosecco midweek, at dinner parties with friends or simply as a treat, and sales show no sign of slowing down.”

Tesco announced that Prosecco sales were up 50% in 2014 and Waitrose reported an annual increase of 58%.

Waitrose BWS boss Pierpaolo Petrassi said: “We know that our customers’ love for Prosecco shows no sign of abating.”

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