Festive frenzy on prices

28 October, 2011

The festive price war got off to an aggressive start this week as supermarkets drew battle lines in the fight for market share.

Tesco and Sainsbury’s slashed 25% off all their wines as well as running a number of half-price deals on Champagne. Morrisons also dropped the price of its Champagnes with Charles de Villers reduced to £14.99 from £28.99 and French Connection Rosé down to £15.99 from £31.99. 

Morrisons was offering 70cl bottles of top spirit brands for £10 – cutting the price by £4.29 in some cases.  Sainsbury’s and Asda were also offering heavy discounts on spirits.

One of the most eye-catching deals was Asda’s £3 wine promotion, available both online and in prominent in-store displays. 

But Asda insisted the price was a one-off deal designed to shift stock to make space for changes to its range as a result of its new sourcing and UK bottling policy.

An Asda spokesman said: “It is just to make space for our new range of 75 wines. Most of the marked down stock has now sold through. 

“We are committed to our three-for-£10 offer, which customers love. As you would expect there are some changes to our range as we reduce our focus on agents and move to a direct sourcing strategy. We have discontinued some tertiary lines and marked them down at £3. 

“The wines within this mark-down are from a variety of suppliers, and the amount of wine left will vary from store to store. None of the deals are below duty plus VAT. 

“We take our role as a responsible alcohol retailer as seriously as we do providing affordable deals for our customers. We led the industry in agreeing not to sell alcohol below duty and VAT, and we’ll continue to lead on this issue – for example, we remain the only supermarket to have not sold alcohol in our foyers since May.”

But suppliers were more cynical. “What company does a range review in October and November?” asked one. 

“What’s happened is that Asda has got wind of the fact that Tesco and Sainsbury’s were going to run 25%-off deals and this is its response. 

“They are all clamouring for market share. Tesco is on a six-week promotional cycle, which is very unusual. It suggests that they are going to come out with other promotions beyond 25%-off, otherwise it will get boring for customers.”

Another supplier warned there were more cheap wine deals to come as Asda cleared its stock. 

Nielsen analyst Stewart Blunt said: “It must be a short-term offer to clear stock. But it is a bold thing to do in the market. When you consider duty, tax and costs, it is quite astonishing. It wants to make sure all the focus is on Asda as shoppers start to plan for Christmas.”

Independent retailer Richard Genders, of the Bottle Stop in Cheadle, Cheshire, warned of the “undermining” effect these deals can have on smaller retailers.

“It’s ludicrous, and it’s a spiralling effect,” he said of some of the promotions. “It’s not even Christmas – what’s going to happen in December? It will all start again.”

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