Consumer is key to UK retail recovery

UK retailers were warned of the need for major changes to the service they offer consumers at last week’s annual drinks business conference – The Bounce Back.

In a session chaired by Christopher Carson, CEO of GIV UK, industry experts Angela Mount, director of Mount & Paul Industry Solutions; Mark Suddaby, category manager spirits for Tesco; and Richard Cochrane, off-trade director at Bibendum Wine, offered delegates their views on “The role of the retailer in recovery”.

“Consumers have never been more powerful”, said Mount as she called on retailers to “think outside the box on new ways to engage the consumer – and engage them at their level”.

Drawing attention to errors made in recent years, Mount added: “The industry has taken away much of the value of premium wines by encouraging consumers to trade down to get bargains. Accept responsibility for this and do something about it or get out of the category.”

Suddaby brought to the table his 10 years of experience with Tesco to support the call for a more considered approach in serving consumers’ needs. “The first thing a customer will always say is that they want it cheap”, he said, before pointing out: “They have a lot of other things to say, but you have to ask the right questions.”

Under the present price-slashing approach, Suddaby believes: “Brands are being abused and customers are not really benefiting.

“It’s not about winning at all costs, but about listening to the consumer, working together and, crucially, about rewarding loyalty.”

As the final panellist to take to the stand, Cochrane lent further weight to the cause by tracking where the retail sector went wrong during what he described as “the decade of plenty” under Tony Blair.

“The democratisation of luxury helped give consumers the chance to do things they’d never have dreamt of before”, explained Cochrane, noting the knock-on benefits enjoyed by the wine industry as UK consumption soared from two litres to over 30 litres a head.

However, despite the number of new consumers brought into the wine category, Cochrane described “the abject terror consumers feel when they rock up at the wine aisle”, calling on retailers to do more to guide consumers through their selection and demystify the wine buying process.

Consumer guidance proved to be a major topic once the discussion moved to the floor, with particular debate over the benefits of having off-licence managers on hand in the supermarket wine aisle to advise consumers. Although Sainsbury scrapped this approach two years ago, the company’s wine buyer Julian Dyer admitted: “It’s fair to say the jury’s out on whether that was the right decision.”

The need for imminent change was driven home by Carson as he summed up the session. “The simple fact is we’ve got more bad news coming: VAT is changing, there will be more duty increases next year and who’s to say the exchange rate will bounce back again?

“Yesterday and today’s model is already out of date. We need a completely new model and the wine industry is just not moving fast enough.”

Gabriel Savage, 12.10.09