Multiple Choice

The high-street Multisaves have failed to differentiate themselves, either through product or that old-fashioned, rather outmoded concept of Customer Service, reports Chris Orr

We all know the figures for supermarket sales in the UK. They account for some 75% of all wine sales. More than 50% of all wines are sold on promotion, blah blah blah. The list goes on. And we all know the criticisms. The big boys are reducing choice for consumers. By peddling big brands and giving less shelf space to “bijoux”, more interesting wines, they are making the wine aisles less appealing and more mundane to the average shopper newly switched on to wine.

And from the looks of it, things are only going to get worse. Virtually all of the major multiples have confirmed in recent weeks that they envisage reducing either their range or their supplier base or both. Consolidation in the industry is making this not only possible, but rather a business necessity for the supermarkets. The kneejerk reaction, as usual, is to paint the supermarkets as the baddies.

The fact is, however, that the supermarkets and supermarket buyers are merely following a tried and tested route in retail, which is namely, give the customers what they want. And what most people shopping in supermarkets want is very different from what many in the trade think they want. Yes they want choice – but what qualifies as too much and what qualifies as too little? Most consumers standing in front of a supermarket wine aisle are pretty bewildered by the vast range of 200-300 wines that sit before them. They may not want to go to the other extreme, where just a dozen wines from two or three different countries sit in front of them, but somewhere in between would perhaps be better.

Which is why I don’t have a problem with supermarkets reducing their ranges. In reality, they are actually making it easier for the rest of the trade to step up to the mark and take up the slack. The question is, are they up to it?

Thresher is a good case in point at the moment. By all accounts its three-for-two campaign on every wine has gone down very well with both store managers and consumers. But it strikes me as Thresher attempting to take on the supermarkets at a game they will nearly always lose i.e. deep discounting. The high-street multiples like Thresher, Unwins, Oddbins, etc, are catering on the one hand to the convenience sector but also to people who have made a conscious decision to buy their wine somewhere other than their local supermarket, to which most will make at least one visit to a week. They have in effect given the retailer a green light to sell them something different from the supermarkets. But all too often they are presented with little different.

I haven’t had the privilege of looking at Thresher’s sales figures following the recent promotions. I have no doubt they will have driven more customers through stores up and down the country, that’s for sure. But I fail to be convinced that long-term the promotion is either sustainable, profitable, or good for Thresher. If it stops the promotion in the future, will it reduce the inflated prices on single bottles? How confusing will that be for the consumer? More importantly, by driving large numbers of customers through the door on a heavy discount basis, Thresher is encouraging a pattern of buying that is little different in motivation or attraction to the supermarkets, but that will also lead to consumer disappointment should those promotions be removed.

Why are the likes of Thresher and Unwins struggling so hard to make a profit? I think the simple answer is that very few of them have given themselves a unique selling point. They’ve systematically failed to differentiate themselves either through product or that old-fashioned, rather outmoded concept of customer service. If you take a look at Majestic, the most profitable multiple wine retailer in the market at present, that’s exactly what you get and it seems to help them rake in the money. It’s a shame then, that with the supermarkets reducing their ranges and their suppliers, few seem willing to effectively cater for the other 25% of the market that have decided not to buy their wine from the likes of Tesco and Sainsbury’s. I could be wrong, but I think there’s opportunity in them there hills, if only someone has the guts to go out and grab it. I sincerely hope I don’t stand to be corrected.