Tesco to bite back with Value wines

11 July, 2008

Retail giant challenges suppliers to create quality entry-level offer

Tesco has contacted suppliers challenging them to deliver higher quality wines at keener price points as the credit crunch begins to bite off-trade sales.

The supermarket is reviewing its range, putting particular focus on its entry-level offer in a move which will see the first Tesco Value wine

launch this year.

Category director for BWS Dan Jago said: "We are reinventing what our entry-level wines look like to offer the best quality and tastes that are great for the price. Just because a customer's not paying £6 doesn't mean they don't deserve a quality wine.

"In the current climate it would be mad if we weren't exploring the value end as part of our ongoing review . It therefore makes sense that areas where we don't have a Value line should be looked at, but it must not end up being generic Euro wine. It doesn't have to be the cheapest wine you can get your hands on.

"Suppliers interested in being part of Value are absolutely in tune with the zeitgeist. If customers say they want less expensive wines, we'll make sure we have†them."

He said the decision to redefine the entry-level range was in response to tough market conditions, which have seen off-trade wine volumes dip 2% in the

four weeks to June 14

-

not proof

its own bid to move consumers upwards with

a broader range , 70% of which w as priced over £6, had failed.

"We will adjust the range to meet consumer demand and are never going to be held to one part of the range."

Jago added that suppliers hell-bent on getting cost-conscious consumers to trade up to more expensive wine without educating them about their choices were "blinkered" to the needs of shoppers .

"Does everyone really believe as we are about to go into a recession that trading up is front of consumers' minds

" he asked. "Wine remains a dis cretionary purchase and suppliers need to be

alert to what is going on and to customers' changing needs. It's no good burying your head in the sand.

"People who don't have the money will not buy wine, but we need them to still buy it

- it just might not be an £8 bottle.

"Wine has become an everyday product for lots of people and it would be a shame to lose them

now because there are lots of other cheaper drinks categories there. We must not lose them because we were busy asking 'why are they

not trading up?'.

Jago added: " Suppliers need to stretch themselves and show

they are more than a one-trick pony.

Those attuned to the current consumer mindset will regard this period as an opportunity - those stuck in a mantra of premiumisation will find it a challenge.

"We are receptive to new ideas but consumers have to understand the rationale behind premium.

"Having premium as a sole topic of conversation gives the impression

a supplier is wearing blinkers."




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