Volumes slipped 1% in the year to September 4, while value sales grew 3% – all down to inflation, according to Nielsen analyst Stewart Blunt. “Sales are going backwards in spite of increased promotion,” he told the annual Wine & Spirit Trade Association conference this week.
“We have recessionary pressure in the marketplace. Things are really beginning to slow down, and the growth rates are entirely inflationary. The market has no value growth whatsoever.” Blunt noted that even rosé sales, which had been booming, have slowed.
The average price of a bottle of wine has increased 15p or 3.5% to £4.44, from £4.29 last year, which Blunt put down mainly to exchange rate issues. “That increase will probably slow down, if not stop, for the Christmas trading period, almost out of desperation,” he said.
A number of speakers, including spirits producers and wine suppliers, said a smaller, more profitable market could be good news for the trade.
Jonathan Sturdy, Beam Global’s European managing director, said resources would be diverted to emerging markets, leaving UK retail shelves to become even more commoditised, if the trade couldn’t inject profits back into the market.
Bibendum’s off-trade director Richard Cochrane added: “I think we will be looking at a smaller, better market – which for our business is hugely exciting.”?Retailers remained convinced education was the key to driving profits.
Majestic chief executive Steve Lewis said: “We work very hard to educate our staff, and the more we educate them, the more they engage with our customers.”?Asda’s BWS category director Adrian McKeon said a poll of 4,000 customers found just 13% agreed it was worth spending more to get better quality.
“We have got a real job to do in terms of education and in terms of quality,” he said.
He added trials of Asda’s Wine Selector had been very successful. The unit, which gives in-aisle information on wines and food matching, is to be rolled out across the UK, China, India and the US.
Hugh Sturges, managing director of Berry
Bros & Rudd, said: “We’re taking the view that wine should be seeking to gain market share against other alcoholic drinks rather than expect growth in actual size. We’re cautiously optimistic – not for great growth but certainly for an improvement in quality, if not quantity.” Paul Letheren, director of Off-Piste Wines, said: “We’re growing phenomenally. If you get the deals and the product right there’s still room for growth.”