Lidl improves wine cellar allocation

Lidl has improved its allocation of wine cellar wines, to make sure stocks in affluent stores don’t run dry.

Lidl has been winning over and retaining wealthier customers, according to analysts (Photo: Wiki)

Ensuring good availability was one of the key things the discounter had learnt from launching its Wine Cellar 18 months ago, Lidl’s head of BWS Ben Hulme told the drinks business as it unveiled its latest Wine Cellar offer for Christmas.

“We have a better idea of quantity and how to keep it on shelf for 10-12weeks,” he said. “Where possible we try to ensure every store has at lease two cases. As a rule of thing, we ensure the same range, with the right wines in store to maximize sales,” he said.

Although the minimum the discounter takes for small parcels of wine is around 6k bottles – enough for 1 case per store – he said the ideal quantity was around 10-16k bottles.

This has been helped by the development earlier this year of a tool allowing Lidl to allocate wines on a store specific basis, rather than having the same amount in every store. Hulme said it allowed the discounter to react to sales of particular parcels of wine in particular stores, and could allocate wines to high indexing stores. This also avoid the logistical problems and costs involved in of returning unsold stock to the depot for reallocation, Hulme said.

It also helped drive footfall in more affluent stores where wine is a key tool to bring in middle class clientele. Hulme admitted that stores in upmarket areas such as Bath and Dorking could receive a higher proportion of premium wines as a result.

In July it announced it was upping the number of wine cellar promotions from four to six, which Hulme said would allow it to run a big promotion every two months. However he said that there were a number of wines that can be used to keep the shelves replenished.

“We can bring those in to keep those shelves filled, although we won’t do a brochure featuring them specifically. The big plus point of the parcel system is the variety, impulse and excitement you can offer, which people can engage in. The challenge is availability and getting stock on shelf – but this is something that we have improved massively,” he said.

Online

However Hulme confirmed Lidl was still looking at an online offering, as revealed by the Drinks Business in July but that  it had no “immediate plans” to launch.

“It is still a question mark,” he told the drinks business. “Our success with the Wine Cellar range has been through bricks and mortar and we’re aware that in store you can bring that idea across fully, with the crates and brochures for people to pick up.

“But equally we’re aware of online and we’re looking at it – but with no immediate plans for an announcement.”

“Hypothetically, if we ever did do it, it would be done properly with a lot of thought behind it, not as a knee jerk reaction to what the rest of the market is doing,” he added.

The retailer has seen wine sales rise 38% this year, with its market share tracking at around 4% in wine, and 3% in spirits. Hulme said year-to-date (March to November) sales were up around 20%, but the discounter was keen to see its market share rise.