Aldi and Lidl’s aggressive march into the grocery channel has seen them steal large chunks of the BWS market in recent years, and Kantar figures for the year to March 2016 show them in growth as the traditional big four all suffered declining sales.
Asda and Morrisons are arguably most likely to be affected by the rise of the discounters due to their value positioning, but they are starting to fight back.
Asda has overhauled its beer, cider and spirits ranges to bring in more craft and premium products, while cutting SKU count in response to the tight, focused ranges impressing shoppers at the discounters.
Senior buying manager Ed Ashley told OLN: “We have just launched a big piece of change with beer and spirits and we have taken out some duplication. We have looked at simplifying the range but also tapping into new trends, such as the new range of craft beers we have just added.”
Fellow buying manager Lynsey Grace added: “We have been flagging up the changes with bold POS in stores. We want to ensure there is good navigation for customers by category so we also have signage within the section, displaying things such as cocktail suggestions. We really wanted to navigate customers on to premium spirits. We have reduced our range of spirits by 12% while adding 40 new lines, most of which are premium, but we are not getting rid of entry-level drinks.”
Morrisons is increasing focus on wine after winning the 2015 IWC Supermarket of the Year title thanks to an impressive medal haul from its own-label offering. It has refused to follow rivals in rationalising its range and pledged to maintain the number of SKUs it offers. It has overhauled its wine aisles to merchandise them by country, while a new “wine festival” is bringing wine to life throughout the store. Wines are now displayed in the bakery, deli, fish and other sections to “encourage shoppers to shop for wine more broadly across the whole store”.
Mark Jarman, head of wine operations, told OLN: “We are pushing the quality envelope year after year. The IWC win was a real milestone for us. It’s the first time Morrisons has won it in the 29-year history of the competition. It has been really positive in terms of the impact it has had on stores, among shoppers and staff.
“We have used the IWC a lot on how we dress the fixture. We have used it on press and TV advertising. It’s had a real impact on bringing customers into Morrisons. Having seen this award as being the preserve of some of the more premium retailers, some people are considering Morrisons as a serious retailer for the first time. “This year we received 103 awards at the IWC. That’s the first time we have received more than 100. It’s a 28% increase year on year.”
New offerings from Morrisons include a Verdeja and an unoaked Cabernet Sauvignon from Spain to “encourage customers to take the next step”.
Morrisons – like Sainsbury’s – has rounded its prices and moved towards EDLP. “We have moved away from deep discounts to more shallow discounts,” said Jarman. “We have also moved totally away from claims. We don’t say ‘save £2’ or ‘save 25%’. We say it was £10, it’s now £8. We have moved to a significantly simpler price mechanic by moving to round pricing – so £6.99 is now £7 – on the majority of our range. The emphasis is on a simpler message to customers.”
The next focus for Asda will be the wine category. “We are right at the beginning of the process for wine,” said Ed Ashley. “We can’t emotionally commit until we see what our customers want. We need to be different and we want customers to come to us, so we will continue to make these changes over the next two or three years.”
He added: “We have seen good sales of some Italian reds, which we would class as really premium wines. A Brunello we brought in six months ago would be £30-plus in many places whereas ours – the Orbitali Brunello Di Montalcino 2010 – is £14.98. It is really expensive for Asda but it has done incredibly well. Not all our customers will buy those wines but there are definitely some who do.
“Last year we doubled the space for Prosecco and it still isn’t enough as sales have been phenomenal. It really suits what our customers want to drink. It’s a fizz at a really affordable price.
“We have nine or 10 Proseccos now, which are tiered. So we have DOCG and an Extra Special, for example. We also have the larger format magnums and customers absolutely love these.
“We introduced two or three Malbecs in the past couple of months and all the ones we bring in seem to do well. And Sauvignon Blanc just goes from strength to strength.”