Summer Drinks: Blue-sky thinking

With the summer full of potential thanks to major sporting events and the prospect of some sun, retailers are no doubt rubbing their hands together at the thought of all the extra alcohol sales that the next few months could bring.

Dennis Williams of Premier Broadway, Edinburgh, believes that this summer is going to be a big one, and he is getting ready to make the most of it through his alcohol category. “It’s really another summer of sport, with the World Cup, the Commonwealth Games, Wimbledon and the Ryder Cup all backing into each other,” he says. “There’ll be something happening from early June all the way to September, which helps alcohol sales. People are staying in more to watch these sporting events as they don’t have the money to go to the pub, which works to our advantage.”

Dennis urges retailers to keep a closer eye on their alcohol sales in order to maximise returns from the category. “It’s important to be disciplined when it comes to alcohol,” he points out. “You need to look regularly at what’s selling and what isn’t when deciding your range, as well as look at the same period for the previous year to get a better idea of seasonal trends.”

Londis retail director John Pattison says the group reported strong sales last year, driven by the alcohol category. “The July sales in Londis were very strong due to the mini heatwave, with an impulse market growth of 10%,” he says. “The drivers of performance were half-price wine, which captured 65% of all Londis promotion sales during the period. Additionally, we did very well with bottled cider, canned cider, multipack canned and bottled lager, with standout brands such as Foster’s, Foster’s Gold, Radler, Bulmers flavours, Strongbow Pear and Strongbow standard pricemarked packs.”

Pattison says that if the weather holds out, all retailers will be in for a successful summer, especially in the alcohol category. “The weather can impact sales of almost any category,” he says. “Of course, warmer weather brings with it more outdoor parties and barbecue gatherings, which can be a catalyst for beers, wines and spirits sales.”

Mark Calloway of Bargain Booze in Salisbury, Wiltshire, is also hopeful for a strong summer. “It’s the World Cup, and that equates to beer and lager sales increasing,” he says. “Hot weather helps as well. When it’s warm, sales of alcohol rise.”

Mark has already planned out his alcohol range and promotions for the summer. “We’ll be focusing on price rather than linked deals, as it’s price that will attract customers to the store,” he asserts.

Pattison believes that the staples will be successful this summer, especially with all the sporting events taking place. “Beer and cider are the categories which will be key for the World Cup,” he says. “Looking back at the 2010 World cup, 29% of beer consumers were new buyers, contributing £84m to the category - it’s a chance to attract new shoppers and increase basket spend.”

All about deals

He advises retailers to shout about the offers they have in store. “Great promotions and offers are vital to helping retailers maximise footfall and profit leading up to and over the World Cup season,” Pattison explains. “Londis will encourage retailers to display multipack can and bottles from four to six weeks before the tournament begins, as this will alert shoppers to the value offering and capture early pre-tournament sales, with four-pack can and four- and six-pack bottles being the core business of convenience once the tournament is under way.”

Pattison also urges retailers to build any sporting merchandise offering around the alcohol section. “It’s important to note that World Cup regalia - scarves, hats, balls, mini goals, flags, posters, timetables and so on - are key to signposting the beer aisle and alcohol chillers,” he says

Satminder Deo of Costcutter Wath in Rotherham says there’s always a spike in off-licence sales when it comes to the summer. “Alcohol always does well in the summer as people are out and about more, especially if the weather is good,” he says. “Cider was the sub-category that drove an increase in sales last year, especially the fruit variants. Brands such as Strongbow Dark Fruits and Kopparberg did well.”

The lines didn’t sell themselves, though. “We really went for it on promotions and theatre with these brands, and it really paid off in sales,” he recalls.

Ben Turner, customer marketing manager at Kopparberg, agrees that retailers need to go big for the summer. “As we witnessed last summer, it’s imperative to make the most of the weather,” he says. “Kopparberg experienced year-on-year growth of 88% through July and August 2013 in the off trade. If we get the same conditions again then it’s super-important to ensure retailers are stocking what consumers are asking for.”

Turner says that fruit cider was one of the success stories of 2013, and he hopes the sub-category will see a repeat performance in 2014. “Fruit flavoured ciders have continued to grow during 2013 and this has been the main driver of growth for the category as a whole,” he says. “The fruit sub-category has increased in value by more than 64% from the previous year during 2013 and is leading the way. Ensuring incremental space for cider, whether that’s in fridges or on stacks, will maximise the advantage of the summer months for the category and help to drive sales.”

Old and new

With sales coming from emerging areas, retailers may feel that it’s time to shake up their alcohol offering. Much like Roy Hodgson being forced to choose between the old guard and new blood for the England team, retailers must decide which brands they should be stocking. But with so much NPD entering the market, they may be in danger of feeling overwhelmed.

Dennis believes that there’s an opportunity for retailers to make additional sales from the newcomers, but warns that the core range shouldn’t be overlooked. “It’s vital that you keep your core range topped up and looking fresh, with some new lines thrown in to mix things up and attract customers,” he says.

Raj Aggarwal of Londis Wigston in Leicestershire says that the question of core versus innovation in alcohol is a tricky one to manage. “It’s important to be able to allow customers to trade up, but you don’t want to do it at the expense of your core sales,” he says. “Core is what gets people in the store and coming back to you.”

To walk this delicate tightrope, Raj suggests splitting the week in two. “Early on in the week is when core sells best, so make sure the staple ranges are fully stocked up and ready for Monday,” he says.

“Then when it gets closer to the weekend start stocking some NPD as people are looking for something a bit different towards the end of the week.”

Kopparberg’s Turner thinks along the same lines. “Make space for broad ranges, but don’t neglect the big-hitters,” he advises. “While there’s a lot of NPD within cider and drinks as a whole, it’s important that retailers focus on the proven winners. Innovation is healthy, but by picking proven winners you give your consumers the brands that they expect to see on the shelf.”