Perception of deals wins customers over

16 April, 2010

If the latest Champagne price war proves anything, it shows just how capable retailers are, to quote Tesco’s Dan Jago, of selling the sizzle around wine, if not the actual steak. Outrage and hysteria abound as prices slump to £9.99, with Lidl leading the charge. Two years since Woolworths launched £5 Champagne under its Worthit! banner (it wasn’t?), retailers have put fizz back in the media glare with their current pricing.

As the race for Christmas sales gains pace, the name of the game is getting shoppers through the door – and headline offers like Lidl’s certainly achieve that. But how easy is it to actually buy the stuff? To test the theory, one suppl?ier asked its salesforce to go into stores while on the road. Perhaps not surprisingly, they found availability was low. In reality, the only place you can currently buy Champagne at rock-bottom prices is in closing First Quench stores – and there’s hardly any of that around. Last weekend, there were more fridge? units for sale in my local store than bottles to put in them.

Retailers deploying a few containers of stock to make tantalising Christmas deals give the aura that, once inside, shoppers will be richly rewarded with a wealth of price-busting activity.

Perception is everything, and pricing at this level certainly yields some very welcome PR. Just how willing other retailers now feel to trump such tactical stunts by investing in loss-leading deals – and on exactly how much stock – remains to be seen. It’s not quite what Jago had in mind with his metaphor but, like it or not, Christmas is lost and won by the amount of attention-grabbing noise your offer creates.

New year, new opportunitiesSamuel Thresher, the man who founded the near-extinct chain 112 years ago, must be turning in his grave over what has become one of the trade’s biggest catastrophes of recent times.

As shops bearing his name prepare to shut for the last time this week, it’s ironic that Wetherspoons is marking its 30th anniversary with plans to create 10,000 jobs over the next five years. While First Quench was endlessly lurching between quick-win strategies which failed, the pub group’s chairman Tim Martin was tucking cash under the mattress and is now poised to invest £250 million on opening new? sites – that’s a lot of 99p pints.

OLN has long been a firm believer in the future of independent retailers, and the silver lining to the First Quench debacle is that there is now a chance for a new drinks retailing scene to emerge, with business people at the helm who, like Martin, seize the opportunity rather than persist with misguided, and eventually suicidal, short-termism.

Events of the past few weeks certainly bring 2009 to a poignant close. And the New Year’s honour list should include all retailers who have circumvented everything that’s been thrown at them this year. No one imagines that next year won’t bring another perplexing set of challenges, but as the crucial countdown to Christmas begins, we wish all our readers a prosperous trading period which brings an encouraging start to 2010.

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