Sales drop 10 per cent but independents 'optimistic'

07 March, 2008

OLN research shows wine in decline but increase in average sale price keeps retailers' spirits up

Independent wine merchants remain optimistic about their prospects for the coming year despite an alarming 10 per cent decline in sales, OLN can reveal.

According to exclusive research, in which 200 of the UK's 500 independent wine retailers were quizzed about their businesses, the sector's sales in 2007 amounted to £221.4 million, down from £247.5 million the previous year.

The figure is doubly worrying given that, in the wider off-trade, light wine sales are up by around 6 per cent, and slightly more for sparkling wine, according to Nielsen. But 61 per cent of independents remain positive about sales growth in the coming year and the good news

is that, despite the apparent sales downturn, the average sale

price has climbed by just over £1 to £8.25

- more than double the market figure.

The results were presented at last week's Specialist Importers Trade Tastings in London and Manchester by OLN consulting editor Graham Holter and Michael Cox, UK director of Wines of Chile, which sponsors OLN's independents project.

They were joined in Manchester by Ruth Yates, of Cheshire merchant Corks Out, and in London by Matt Harris, of Planet of the Grapes.

Holter said: "The word that springs to mind when you look at the 10 per cent decline is 'ouch'. Part of the problem is clearly the continuing success of the supermarkets and perhaps the growth of online sales to an extent, but it could also be that some independents are frankly not as good as they thought they were.

"These shops are battling it out for a 4 per cent slice of the market and, while some stores are setting ever-higher standards in wine retailing, there are others who are not as profitable as they could be because they're not working hard enough to give consumers what they demand."

Cox urged independents to think differently to the supermarkets, but also to question their own reliance on France, which is described by 48.4 per cent of independent wine merchants as their specialist area.

Australia is described by 11.7 per cent of independents as the main focus, a 46 per cent decline on the previous year.

More details about the findings of the survey appear in our Merchant Update section on page 24.

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