Davenport direct

05 September, 2008

Wine-buying figures may look good, but analysts say a whole sector of drinkers has already given up on plonk

J ust how willing shoppers are to take a wander down the wine aisle

en route to the Fairy Liquid has been the subject of fierce debate and speculation. In our last issue, we reported boom times at the top end of the market, with independent merchants saying they have never been busier as punters buy into the best BOGOF of all - two bottles of their favourite wine for the same money that would get them one in most restaurants.

These are arguably the customers the trade identifies with the most - the ones for whom wine has become an integral part of their life, a pleasure they enjoy and can see the value in paying for. For them, diverting the £40 they were forking out in the on-trade for a bottle of Cloudy Bay and getting two in return makes good economic sense.

But it's an entirely different matter at the other end of the market - according to Nielsen at least.

Rather than hanging out the bunting at its latest figures, which show wine growing by 5%, it is urging extreme caution. Analysts

are concerned that, as the duty hike bumps up the market's overall value figure, there is a risk of ignoring the fact that a large chunk of consumers have already stopped buying wine. In their view,

consumers who were happily glugging

a £2.99 wine are simply not putting it in their trolley.

It's fair to say

the quality of wine they were experiencing was far from the industry's finest, so perhaps giving it up now isn't such a sacrifice. Or at least less of a sacrifice than

fundamental purchases such as petrol or detergent.

The economic downturn was obviously going to hit those on lower incomes first, but there is a sense that the trade underestimated how difficult even the most hard-up would find foregoing that occasional bottle of wine.

The challenge now will be whether they can be encouraged back into the market. With money tight, and so many other drinks categories vying for what cash is floating about, it's difficult to be positive that they can be won back round. The supermarkets are clearly hoping they can - though may be resigned to the fact that they could be lost, temporarily at least.

There is also a feeling of damage limitation, because by increasing their presence in the middle tier grocers are clearly hoping to hold on to the next band of consumers who could very soon be feeling the pinch in just the same way and might not be as loyal to wine as we choose to believe.




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