Life at the coalface

14 November, 2008

The challenges

facing the trade seem to be increasing week by week. OLN asked retailers and buyers how business is shaping up, and

how the thorny issue of beer pricing influences their strategies

The buyers

Q Have you changed the way you promote beer sales over the past year?

Giles Fisher, senior buyer for beer, spirits and tobacco , Waitrose: "We don't offer BOGOF deals, but we do still offer our customers competitively priced promotions."

CJ Antal-Smith, Asda's buying manager for beer and spirits: "This year has been an evolution of our strategy on bulk beers. We have moved away from the reliance of a sustained multibuy offer, thus rewarding our customer base with new fresh offers on a more regular basis. We also have evolved our ales strategy and have landed new concepts, including a guest ale programme and new POS to make it easier for our customers to shop."

Q Have you noticed any new trends in beer sales over the past year?

Fisher: "Of late, as the credit crunch has hit harder, there has been a significant switch from premium lagers to standard. Sales of premium ales, however, have remained strong."

Antal-Smith: "The trend that remains consistent is around our customers searching for better value and better prices. As the fastest growing beer retailer over four, 12 and 52 weeks,

Asda will continue to look at supporting customers - the majority of whom do drink responsibly - in these tough economic times."

Q Do you sell beer below cost?

Fisher: "As part of our BWS promotional strategy we don't promote alcoholic products below cost. We strive to offer our customers competitive deals, great value and quality in our beer range with excellent customer service."

Antal-Smith: "We don't set prices in isolation. Calculating what is and what isn't below cost is not a simple equation, as it doesn't take into account factors such as marketing agreements and competition. The BWS category is a core part of our business, offering competitive value in the same way as other parts of the store. As a category it is profitable - which it wouldn't be if we operated an overarching policy to sell below cost."

Q Do you think selling beer below cost is irresponsible retailing?

Fisher: "Certainly it is not something that we have been involved in as part of a promotional or

footfall

driving policy."

Antal-Smith: "We operate in a competitive environment and our aim is to give customers best value. No one has yet come up with a definition of responsible retailing which is of any help to the industry. We deliver value to 16 million customers weekly across the UK. They trust us to be responsible for helping them make their money go further."

Q Do you think the current government proposals will affect the way you sell beer if they come through?

Fisher: "There are many potential changes being proposed in the UK law, many of which may not have time to come to statute in this parliament. We will adhere to the changes in Scotland in our Scottish branches and monitor the impact. Some of the changes being proposed across the whole of the UK would

have an impact on the way we

sell beer. For example, we do occasionally position beer outside of the BWS area (Cobra beer is sometimes positioned in chillers next to our Indian ready-meal range - this sort of thing could be illegal if all the possible changes were adopted). However, the focus for Waitrose will remain on offering value, quality, a

unique range and unsurpassed customer service."

Antal-Smith: "In terms of Scottish government proposals, these would clearly affect the way we sell beer - in that we'd only be able to sell alcohol from certain areas of the store and at certain times. We wait to see more detailed proposals for England and Wales before commenting."

The retailers

Q What's currently selling well

Sam Jackson, owner of Scatchards,

Chester: "Our best sellers tend to be the local British beers, so it's Weetwood's Eastgate Ale, Storm Brewery, Station House First Lite, Purple Moose and Great Orme. Generally, the stock favourites are Black Sheep, Theakston's Old Peculier and Sam Smith's. Foreign beers include Fruh Kolsch, Maisels Weiss, VB, Desperados and Peroni Gran Riserva. Sometimes one customer can make a particular line a very popular one on their own so it's difficult to be precise, but I would say those are the general trends."

Zak Avery, manager of Beer Ritz,

Leeds: "Business is going surprisingly well and we haven't seen any downturn th is year. Our bottled beer sector certainly seems to be in growth and people are more interested in PBAs and local beers. The interest has been phenomenal in Leeds

Brewery's beers - a microbrewery that started bottling about nine months ago. Our three biggest sellers are ales brewed within 20 miles of the shop. There has been a trend of people buying local produce in the food market and now that's gone into beer too."

 

Have you spotted any interesting trends in the run -up to Christmas?

Jackson: "We haven't started doing our Christmas range in full yet, but we start selling fuller bodied beers as the weather gets colder and darker. Christmas beers are very popular during the festive season. We also sell draught beer in takeaway cartons at the weekends, and it's usually the lighter styles that sell better than the rich heavy beers. We don't sell that many Christmas gift packs any more, they aren't as popular as we thought they'd be.

I think it's because when you add it up you're paying about a fiver just for the cardboard packaging. We sell far more of our own made up beer baskets. Although the packaging is still a fiver, it's a fairly substantial wicker tray,

Cellophane and bow, and you can get up to 12 beers in a basket so it's proportionately a lot less."

Avery: "Christmas business doesn't really kick in until quite far into December - the last two or three weeks in the run-up are bedlam."

 

What's not doing so well beer-wise?

Jackson: "In particular there are some British and American beers which are imitating European heavy styles and I think these are a little slow because they are not so well understood. Examples are Croglin Vampire Doppelbock, BrewDog's range and Dogtoberfest, which is in a German Marzen style and not everyone's cup of tea. My partner Steve would say that it's not that they are unpopular, but they are at the more extreme end of brewing so don't have the universal appeal of easy drinking styles."

Avery: "We seem to be sliding in the face of trends - for us it's been a year of growth."




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