Wine sales in the £6–£7 bracket are up 6.5% among the grocers, but are growing just 3.4% in the impulse channel, while in the £7–£8 tier multiples are enjoying 10.4% growth compared with 3.8% in convenience (Nielsen, year to June 21, 2015).
In the £8-plus bracket the grocers are growing sales by 4.6%, while c-store sales are up 3.9%.
Wolf Blass supplier Treasury Wine Estates has spent the past year urging convenience retailers to champion premium wines, but a reliance on cheap wine has proven to be an obstacle.
Shaun Heyes, head of wholesale and convenience at the supplier, told OLN: “It’s not a great performance [for convenience]. Over the past 18 months to two years there has been a greater focus placed on lower-priced wines rather than trying to drive premium.
“This is going against what we see in the total market, driven by grocery. There’s too much focus on wines lower than £6 and lower than £5. You can question how sustainable that agenda is going forward.
“Historically the impulse sector has performed well in premium wines, but grocery is significantly outperforming the impulse channel in growth in the £6–£7, the £7–£8 and £8-plus wines.
“Grocers are reviewing ranges and selling more premium wines compared with what we are seeing in the impulse channels. Convenience retailers need to respond to that.”
The average price of a bottle of wine in the impulse channel has gone up from £6.07 a year ago to £6.12 now, and it is still way ahead of the average price in supermarkets, but Heyes warned that c-store owners will be left behind if they fail to act now.
"The grocers' mix is changing the right way, whereas in impulse the growth rate is declining,” he said. “There is a real opportunity for convenience retailers to take some action in order to benefit.
“The trajectory of volume and value is getting closer together in impulse and that is not good. You want value to be growing ahead of volume and £6–£8 is really the sweet spot to target.
“People are talking about premiumisation but the traction isn’t there yet. The grocers are doing more in this area now and are therefore growing faster, so it’s a definite lost opportunity. With the right offering convenience stores can sell more high-priced wine than many retailers think they can.”
He added: “Convenience retailers need to get the right range, a balanced range, not just [featuring] our brands and the price points we operate in.
“It’s making sure that there’s a decent range — a range of price points, varietals, countries of origin, the right amount of sparkling, rosé, red, white and so on, not having too much duplication.
“In the convenience sector, space is precious and you want to use it to have the broadest possible offering to accommodate as many shoppers’ needs as possible.
“You need straightforward merchandising principles. It’s a massively complicated category. Simplify it well and you open a real opportunity.”