RETAIL NEWS

Terror scare hits wdf…Discounters to expand…Showcase for new world…One-bottle promos off…Tesco focuses on fine wines

Terror scare hits WDF

World Duty Free, the BAA-owned retail operator at seven of the UK’s leading airports was dramatically affected by the terror alerts that paralysed British airports last month.

The UK and US were placed on the highest level of threat warning. Unsurprisingly, the ensuing chaos was a major blow to the world’s leading travel retailer.

“On the first two days after the scare we were selling very little. There were lots of different messages about what passengers could carry,” explains Mark Riches, WDF managing director. Hardest hit were the stores at Heathrow T3 & T4 and Gatwick South, which carry heavy North American traffic.

As the drinks business went to press (two weeks after the alerts) normal service had resumed at all regional airports. Riches anticipated a prompt normalisation at the three most affected locations. BAA retail manager Colin Hargreaves explains that an extensive advertising campaign was immediately initiated to inform customers what they are allowed to buy.

“We are never surprised by the challenges we face in the aviation industry. Of course, security is paramount,” says Riches. “It is important that we put out a single, unambiguous message.” Looking ahead, he is confident that the “resilient” travel retail industry will “bounce back quickly” from this brief crisis.

Discounters to expand

Discounter chains Aldi and Lidl are set for strong growth, according to a new study produced by Allegra Strategies. The report expects the channel to ultimately capture 10% of the total UK grocery business (currently it commands approximately 5%), and anticipates that the total number of stores operated by the two chains will grow from 700 to 1,100 by 2010. These ambitious predictions suggest that total Aldi and Lidl sales will grow 86% to £5.6 billion.

Allegra argues that the discount chains seriously miscalculated when they first hit the UK market in the early 1990s, underestimating the strength of the indigenous chains and communicating poorly with consumers.

However, they are now set to benefit from the growing trend of “schizophrenic shoppers”, who are comfortable combining both budget and luxurious shopping (the sort of consumers who fly EasyJet to their five-star villa in Nice).

Showcase for new world

Waitrose is dedicating substantial floorspace to an extensive showcase of New World wines this month. Running for three weeks until 24 September, the event will focus on 50 wines: 20 of the most popular references from the existing range and 30 limited-availability newcomers. This major push follows a similar focus on French wines in the spring, which generated substantial sales uplift, with ACNielsen market share up from 11% to 16% and average wine spend up from £5.40 to £5.68.

The activity will dominate the wine section and also bring the category out into the front of store, occupying three highly visible bays near the entrance. This prominent space is reserved for seasonal products: the French campaign in the spring took place as soon as the Easter eggs had been cleared away, and the New World showcase fills the three-week window between summer and autumn seasonal products. The fact that wine has been selected to fill this promotional stronghold indicates Waitrose’s dedication to the category.

One-bottle promos off

Oddbins has halted all price promotions on single bottles of table wine, effective 21 August. However, the chain will still offer a 20% discount to customers making bulk purchases of at least six bottles of its “exclusive” range – products that are available only at Oddbins and that make up almost 90% of all listings.

The company explains that this decision has been made to ensure that consumers can have a better understanding of the relationship between price and quality. It will also allow many single bottle prices to be gradually reduced on an on-going basis.

“This is a very positive message for us,” explains Emma Nichols, head of buying. “We have always been at the forefront of wine education, and by offering a genuine price for the wine, we are able to ensure that our customers can trust that they are getting what they pay for.”

As well as the bulk discount deal, Oddbins will also continue to run its existing promotional activity for beer and Champagne.

Tesco focuses on fine wines

TESCO has recorded a strong performance in its fine wine selection during the past six months, and it is looking to commit more resources and space to this growth category. With exceptional figures reported for a range of high-end Spanish, Italian, Argentinian and French wines from smaller producers, the retail giant has announced plans to increase the range of products available and the number of stores where they are listed.

“We are delighted with the success of the fine-wine range, as well as the consumer and trade reaction,” says wine category manager Jason Godley. The chain plans to add at least five new suppliers to the autumn schedule.

© db September 2006