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Supermarket Sweep
“standfirst”>Matt Spencer is the new broom in Asda’s wine department and his mission is to reverse the store’s undertrading in wine. Will he get the Sharon Osbournes of this world to trade up from Liebfraumilch? wonders Robyn Lewis
Matt Spencer is a man with a problem. And a drink problem at that. But it isn’t too much of the stuff that’s the problem – it’s not enough. Spencer, the newly appointed commercial buying manager and team leader for wine at Asda, has been brought in to tackle the supermarket’s undertrade in wine. “We enjoy around 16% of the grocery trade but our wine share is more like 10%, so there is a significant difference,” he explains. “It isn’t as if customers are rejecting Asda per se – we get a lot of customers through the door each week, around 12m – but they just aren’t buying their wine from us and we have to look at why that is and try and change it.”
His first task, he says, will be to look at the range “and cover all our bases in there, cutting out the duplication for a start. I mean, why do you need 10 Chardonnays at the same price point? You don’t, and so it is about focusing on the growth countries – which means New World over Old World primarily, and also really getting behind some of the winners that we’ve got in brands and own-label as well. However, it isn’t all about cutting SKUs, it’s about making it easier for the customer to shop because a lot of the feedback we get is about customer confidence as they approach the wine fixture. They really don’t know what they are buying in a lot of instances because it is a very complicated area and the industry hasn’t made any real inroads into addressing that.”
Does this mean Asda will be the first multiple to do something really radical with its wine aisle?
“Well I don’t mean to suggest that we are going to go about making any fundamental changes in the way the category is laid out and organised. What we wouldn’t want is for our customers to be able to walk into the competition and in 99% of cases see the same style layout, and then walk into our store and see a whole different approach. That’s not to say we aren’t looking, though, and researching the way people shop the wine aisle but we have to be aware of walking before we run. We’ve got to take the customers with us rather than leave them behind. “We have undertaken some research and what we are finding is that different consumers approach the category very differently, there is no one size fits all for wine. What we are looking for is to find a route that is understandable to the majority of customers, so when they look at it, it may not be the way they shop but they can buy into it and say, ‘I see, I know where to buy my products here.’
To do that we need to give more information at point of purchase, improve navigation through layout and signage. You know, this really isn’t rocket science we’re talking about here.” But wider social and demographic trends are also playing their part in changing the way people are shopping, according to Spencer. With growth in two-person and single households there is less need for the traditional big shop, he says. “I think, because of this, what we are seeing is increased strength within the convenience sector and it is no surprise that we are seeing some big multiples move into this market. Now, just because we don’t have any convenience stores doesn’t mean this isn’t an issue for us. We do have smaller stores and also people pop into larger stores for a convenience shop. It depends on the location – is that the only store in their locale? – and those kinds of things. It’s down to shopping ‘missions’ now, where people are shopping for quite specific reasons.”
Another problem that Spencer faces is increasing average spend per bottle, which currently lies at between £3 and £4. “We are hoping to tackle this issue through a combination of promotional mechanics but also education. We have to work out how to give consumers the confidence to understand the difference between one Shiraz and another. We can use shelftalkers and the media we already have available to us such as the Asda magazine and leafleting. Also we have the EDLP plus platform, which means that we can instigate trial and trade-up through that. Obviously, we are committed to having the lowest prices for our products in the country, that’s what we stand for at Asda, but promotions give that extra value for customers. And, in fact, we have listened to a lot of our suppliers who, when we said we wanted to revitalise the category and to drive market share and asked how they thought we could do that, pretty much without exception they said, ‘You need to promote.’ It is more of an elastic category than, say, household, which is more commodity-based.”
There is, however, a commodity element to the wine category, of course, and Spencer is quick to defend the price-conscious wine consumer. “Primarily because of our customer profile and the pricing of most German wines, we do have significant overtrade in Germany and, yes, that means Liebfraumilch. Some people will not move from it, and that’s fine. We must make sure we have that available for them at a great price but let’s start talking to them about some of the wines around there and saying, ‘If you liked that then try this.’ What we need to be doing is more work like the Champagne and sparkling wine promotion we ran earlier this year. Historically, this is a category in which we have undertraded but we ran a 25%-off offer and saw significant uplift as people crossed town to come and pick up some of the advertised branded deals – and our ownlabel did well as well, for those who wanted a more value proposition.”
A consistent run of results like that and Spencer will be without his problem soon enough.