Retailers should pare down their ranges and concentrate on driving value into wine.

Convenience stores are missing out when it comes to adding value to their wine offer by failing to invest in the sparkling and chilled white sector, according to HIM client director Noel Reidy. “C-stores are very price- and promotion-driven, with a focus on cheap liebfraumilch and brands. The way to add real value, though, is through chilled and sparkling.”

He says sparkling and chilled wines give c-store shoppers a bit more of a prompt to buy as they’re ready to go - and they give shoppers a point of difference to the mults. He says that c-stores could also put in more premium wines in this area: “Convenience shoppers aren’t usually looking for multiple buys - they want to buy for themselves or are on their way out and are looking for something to take with them, so will often trade up. Gifting or treating are areas to look out for.”
While wine sales continue to do well, with value growing at 31% between 1999 and 2004 to £7.6bn (Mintel Wine Report 2005), prices have been affected by multiple discounting, meaning that the retail price of the cheapest bottle of wine has risen just 50p in 25 years. However, as in beer, the take-home market continues to thrive, with estimates that this accounted for 80% of all wine volume in 2004 (Mintel). French and Italian wines have been hit by the massive growth in New World wine, with the USA and Australia leading the way. However, markets such as South America continue to emerge.

Mintel also reports that consumer interest in rosé is growing, as is organic wine, which can sell for premium prices, and fair trade wines. According to HIM’s Convenience Tracking Programme, one in 20 shoppers buys wine, giving an enormous potential for growth in sales. But there’s a long way to go to reach the one in 12 customers who buys beer. However, convenience store retailers can be comforted by the fact that wine consumers tend to be more affluent than shoppers of other categories and will spend if they think that a category meets their needs. These types of shoppers tend to make distress purchases and, in the survey conducted by HIM, stated that availability was as important as value for money or speed of transaction. They prefer consistent, good value brands that they can trust. Even better news is that consumer spend of shoppers in this category is £10.18 per trip compared with an average spend of £5.26. The wine shopper also makes about 14% more trips.

Reidy says that c-stores need to look at the placement of their fixtures - he advises they bring them forward into their store and put chilled wine near the home meal section to catch shoppers on their way home from work. He says that retailers often place too much emphasis on price and promotions when it comes to selling wine: “They think the panacea is promotion, but the panacea is having a good range and availability. Price isn’t the paramount consideration in this market. People will have a budget but won’t worry if it’s £1-£2 over. The need outweighs the budget.”

He suggests that retailers be daring and cut their range - concentrating on wines that they know their customers will want. Older shoppers may well have gone through their New World phase and settled back to the traditional wines from Europe, whereas younger, transient customers may want tried-and-tested brands. A smaller range, geared to your shoppers, will offer customers exactly what they want without bewildering them.

* Take-home drinking is at its highest level in two years as 43% of people enjoy a drink at home on a weekly basis.

* Drinkers aged 35+ are most partial to a drink at home, rather than in a pub or bar.

* 62% of take-home drinking occasions involve food.
Source: TNS AlcoVision/Diageo

Retailer View

Malcolm Jones has seen a definite shift away from French wine over the past six to 12 months. He’s not sure whether it’s because of changing tastes or something more political, but sales are down across most of the French wines other than a couple of brands as drinkers switch to New World wines, in particular, Australian.

“One or two, like Stowells Merlot, sell but I’ve dropped
a lot of French wine and have reduced it to one facing on the bottom shelf.” Malcolm has been manager
of Touch Trading, a Londis store, in Kidlington, Oxford, for four years. The 900sq ft shop has a couple of metres given over to wine, and chillers for white wine and rosé. Chilling, he says, is one of the most important factors for sales. “If a red is on promotion up against a chilled white the chilled white will sell first,” he says.

Another of the major trends he’s seen over the past few years is a rise in sales of rosé, which he says tends to come from red wine drinkers who are looking for something lighter. He promotes a new wine every three weeks through Londis and says that this can often drive repeat purchases.

To further encourage sales he puts wine information leaflets on shelves and categorises wine by country: “I’ve thought about wine tastings but I’d like to get more expertise behind me before going into this.” He chooses stock mainly by listening to customer feedback and by looking at sales, although there are always surprises. A recent addition, Turner Road Pinot Grigio is, he says, currently flying off the shelves.

Retailer View

Peter Bellini thinks that his store, Bellini’s, was one of the first forecourts to apply for a licence back in the 1960s. “We already had a store at the forecourt and wine was another commodity to offer customers,” he says. He runs the store in Ilkeston, Derbyshire, with his wife Pat and confesses to a long interest in wine, to the extent that he holds a diploma on the subject which he took through the Wine and Spirit Education Trust. He says that this specialised knowledge both surprises customers and helps differentiate his store from the multiples: “Training is important; it gives us a point of difference with the supermarkets.”

He now employs a wine manager to look after his stock. “We’ve always tended to specialise and move away from the ‘all things to all people’ offerings. We use lots of smaller suppliers and offer wines from around the world, including unusual places such as Lebanon.”

He says that French and Australian wines have always been strong but other areas are now emerging. The quality of the wines, he says, has definitely improved since he’s been selling them and customers tend to be more knowledgeable about what they want to buy. He helps consumers with purchasing by utilising pos and bottle-neck descriptions.

The store has built up a database of customers interested in learning more about wine and offers wine tastings in the coffee shop. He also has about 2.5m of chiller cabinets, which helps with impulse sales.
“We’re constantly changing what we offer,” he says. “It’s the lifeblood of it.”