Lidl ramps up Wine Cellar promotion

Discount supermarket Lidl continues to move into upmarket wine retailing in the UK, as it takes on 60 new lines and plans six “Wine Cellar” promotions for next year.

The German retailer – which opened 20 new UK stores in the last calendar year – has seen its wines sales in Britain expand rapidly, with 38% sales growth in the past 12 months, representing an additional £60 million worth of business, taking its share of the market to a little over £200m – meaning it now accounts for 4% of the £5bn UK off-trade wine sector.

In a bid to make further inroads in the competitive UK market, Lidl is planning to increase the number of Wine Cellar promotions, which see the discounter bring in an additional number of labels into its stores for a limited period.

Earlier this week the operator unveiled its latest range under the Wine Cellar concept, comprising an extra 60 lines, all of which are from France, and include more obscure wines such as an Arbois (from the Jura), and a white Châteauneuf-du-Pape.

According to Lidl’s UK wine buyer Ben Hulme, these labels will arrive in stores on 3 September, noting that the Wine Cellar concept began “in a small way” back in 2012, although its “big launch” was last year.

In particular, he told the drinks business on Tuesday this week that Wine Cellar “had gone very well” and had created a “halo effect on the rest of the listed range”.

Speaking further about the Wine Cellar concept, he said he had been “inspired” to introduce the series of seasonal wine selections by the success of the foire aux vins (wine fairs) seen in French supermarkets, which tend to take place in September, and are usually focused on Bordeaux.

Indeed, last year’s Lidl promotion was centred on this famous French wine region, although Hulme said that the selection could have been “more balanced”, adding, “maybe we did too many wines from Bordeaux”.

Lidl only run the Wine Cellar promotions in the UK, but Hulme said that those in charge of the discount retailers in France were watching closely the outcome of this retailing strategy, and may be tempted to adopt it.

Hulme also said that Lidl were currently running four Wine Cellar promotions annually, but would be increasing this to six next year.

Among the best performers, Hulme picked out French sweet wines, describing their sales as “a revelation”.

“In the UK it is rare to find sweet wines below £10, particularly for a full sized bottle, but we are doing this, so people are coming to us to buy it,” he explained.

Historically, the most expensive wine Lidl has sold in the UK has been St Julien’s Château Lagrange 2009 at £39.99, but today’s priciest label is a Margaux: Château La Tour de Bessan 2012, at £16.99.

As for Lidl’s best seller, that comes from the retailer’s core range, not the Wine Collection, and is currently Prosecco. Hulme even described sales of the Italian sparkling wine as “absurd, to the point where he have listed an additional Prosecco – we now have a DOC Prosecco at £5.29 and a DOCG at £7.49 – to ensure we always have a Prosecco in store.”

Continuing he recorded, “Sales of Prosecco have gone through the roof, and it is a challenge to get enough stock in-store all the time.”

Speaking generally about Lidl’s approach to wine retailing, Hulme told db that his aim was to have a single benchmark best-value product for each wine type.

“We cover as many bases as we can, so we have, for example, one Australian Chardonnay, rather than 25, so the quality of that wine has to be on point, we don’t have the luxury to play around.”

Continuing, he stressed that all Lidl’s wines were sold on a “everyday low price (EDLP) – they won’t be £10 one day, and £5 the next – there is no messing around with silly promotions for two weeks of the year; there is no smoke and mirrors at Lidl: we aim to be the best value 365 days of the year.”