The Co-operative Group’s BWS trading manager, Simon Cairns, has every reason to be in a bullish mood after the retailer increased its share of the wine market from 9.4% to 10% in the past year (Nielsen). It is the first time the Co-op has ever been in double digits and Cairns says this is just the start.

He has just implemented the largest single range review the wine department has seen in years and expects the upturn to continue when its impact is felt. “The Co-op has never been in a better place to capture the increasing trend towards local and convenience shopping,” Cairns tells OLN. “We are totally about convenience. We understand our customers and our market. We have a responsibility to energise this sector and now I believe we have the confidence to do it.”

It is a bold statement, but spoken with the ebullience that comes with a set of box-ticking, assertive performance statistics. Against a backdrop of recent sliding sales among the grocery multiples, the convenience sector is showing slow, but steady, growth. With more than 4,000 stores, the Co-op leads the way, boasting at least one store in every postcode area in the UK, and is set to maximise on the ever-shifting trends in consumer shopping habits.

But, until recently, ranging for these 4,000 stores has been frustrating for Cairns and his team, as it worked on a simple “scale up” model based on store size that gave minimal consideration to the retailer’s diverse and disparate regional and demographic customer base.

All this is now changing, with BWS leading the charge in a company-wide initiative that will see seismic changes to ranging in individual stores across all categories. “To date, we’ve tried to do the basics really well,” says Cairns. “We focused on availability, the promotional plan and kept a tight balance, but we couldn’t deliver what many of our customers needed. That’s all changed and this is the start of the most exciting evolution the Co-op has ever seen.”

Three weeks ago, Co-op stores across the country began to implement range changes to their BWS sections after Cairns’ team devised customised, tailor-made range plans for the various different stores across the estate.

“Other retailers are consolidating and reducing range,” Cairns says. “We’re definitely not. We have a tight range of just under 400 SKUs. We’re still finding new, exciting wines. What we’re doing now is putting the right wines in the right spaces. It’s been a long journey to ensure that we have the right products in the right place.”

The newly defined overall Co-op strategy is to get the right products into the right stores. The retailer is testing this with BWS, but aims to roll out a similar strategy into wider grocery later this year.

It has identified 21 different customer clusters, based on need, location, demographics and attitude.

By its very nature the Co-op has an exceedingly fragmented consumer base, ranging from affluent city centre stores, to student communities, through to the highly important stores it calls “rural main shops”.

While upmarket but traditional Lytham St Annes in Lancashire might require three different Riojas to suit its affluent but older shopper base, the cartoon-inspired labelling of Grecula – a modern-style Greco di Tufo with a great value price – is better positioned in student communities and city centres.

Throw in petrol forecourts and railway station locations and the picture becomes even more complex. Perhaps the most graphic illustration of the range review is the move of top-notch Château Sénéjac Haut Medoc, retailing at £16.99, from a smattering of stores to more than 800.

For the buyers, range selection and the extent of distribution in convenience retailing is a major challenge.

“Let’s dispel the myth that ranging for a small format is easy,” says Cairns. “It’s about as hard as it gets, since we need to get the right mix to the right customers, without the luxury of space.”

On average, a Co-op store will have 8ft of red wine and 8ft of chilled wines, a maximum of 88 reds and 80 whites, plus sparkling and rosé to fit in. With a plethora of options, it makes for a formidable decision-making process. 

The new ranging has been determined on the basis of Co-op membership data, regional statistics and Nielsen data, together with insights from key suppliers and the retailer’s own insight team, enabling the decision makers to see more clearly through the eyes of a shopper.

“It’s all about one core plan,” Cairns says. “We started with a blank sheet and looked at each product, at the customer need and where each product ranked within that. We grouped products by need, style and shopper attitude. In small stores, we’ve had to peel away the layers of duplication in order to give them the diversity they need and make the choice for that particular customer cluster.”

The new focus is on providing clear messages and quality at every price level, reinforced by stronger packaging, medal-winning wines and the removal of duplication.

With one of the most experienced buying teams in retail, with stalwarts such as Ben Cahill, Gyles Walker and Edward Robinson on board, the Co-op’s wine-buying ship appears to be in safe hands.

But the change meant a new way of thinking for the team. Cairns admits it has forced a volte-face in the way his buyers run their categories.

“We’re no longer country targeted,” he says. “As a team we have to look at this new plan holistically and it has forced all of us to think in different ways and take a longer-term view.

“Buyers can’t look at their individual categories anymore, or work in silos. They are part of the key decision-making process of wines that are right for our fragmented and multifaceted customer base. It’s crucial that we work as a team.”

Cairns is refreshingly honest in his view of the past six months, admitting he’s been obsessed with planograms and individual merchandising plans to get the strategy and implementation right.

“We’ve all spent a lot of time in the bunker, just nailing down the right ranges for the right stores,” he says.

“We’ve had a complete reset in terms of how we think about range and about our customers, based on the insights we now have. I’m enormously proud of the team, how they have evolved their way of thinking, and how we can now let our wines develop their own personalities
on shelf.”

He is also clear on the role of the Co-op in the light of growth in online sales. “It’s a different buying need,” he says. “Online may be the swiftest growing sector of the wine market, but for distress and convenience purchase, with the majority of purchases consumed within 24 hours, the Co-op is firmly set on fulfilling those needs, in whichever catchment area of the community.”

For the first time BWS is being combined as a whole range, and this in itself demonstrates the thinking behind the plan. The convenience shopper is promiscuous and buys according to need that day, rather than embarking on a specific main shop. A key element to success across the alcohol category is the ability to fulfil regional trends, such as cider and local ales, and events. Hence the recent focus on gifts for Mother’s Day and now a link into barbecue season.

And what about relationships with suppliers? “We listen to our customers first, not our suppliers,” is Cairns’ clear message. Having said that, the Co-op demonstrates a refreshing loyalty to suppliers that have worked with it on this recent journey. The suppliers that succeed with the Co-op are those that work in tandem to develop wines customers want, and truly understand the Co-op’s business.

The supplier base has not altered a great deal, despite the radical in-store changes. “We need our suppliers to understand the shopper journey and to come on this journey with us. We are all about building long-term relationships with producers and suppliers who understand what we are trying to achieve,” says Cairns. “With the current customer trend to convenience, we are finally getting more of a voice, and it also brings us more on to the supplier radar. We’re just starting to scratch the surface of what we can achieve, working in partnership with our key producers.”

The new range strategy is still bedding down across the country and, with the earlier Easter weekend, it’s yet to see a tangible impact.

Cairns is sharp on the team’s vision for 2016 and conveys not only an engaging optimism, but also real determination. “We know convenience better than anyone. We now need to show authority in this category. We have a duty to keep the high street alive. This is just the start of our journey.”