UK: Good wine at stable prices – that's what shoppers really want

Nov 9, 2015

(Telegraph) - Why did the grandad cross the road? Because he saw a bargain on the other side,” was a favourite joke when I was a kid. Our grandad’s house was stuffed with utterly useless but apparently irresistible novelty pens, DIY accessories, car seat covers, golf balls (he didn’t play golf) and so on, all of which he had snapped up in a deal. It turns out he was ahead of his time: the thirst for acquiring, well, anything – whether it was Three for Two or Buy One Get a Beer Mat Free – has now infected the nation.

To my huge frustration, promotions have been particularly instrumental in selling supermarket wine. I’ve spent much of my career explaining that a “£13.99” wine sold at “half price” is just a £7 wine sold at £7, and is often worse than a wine priced at £7 all year round, because it’s made in gigantic volume and the people who sell it think that those who buy it are mugs who won’t notice what it tastes like.

The difficulty is that the good wines get promoted too (usually by 25 per cent or 33 per cent) so I end up recommending deals – well, I’m not going to have you buying wines at an artificially high price, am I? – and the whole circus self-propagates with the result that true value is obscured and no one dares buy a supermarket wine that isn’t on promotion in case they’re being ripped off.

Now we’re in the middle of a shake-up, and we have Aldi and Lidl to thank. For years, supermarket wine chiefs have wrung their hands and protested that they hate promotions too, they’d like to stop confusing drinkers with a whirling tombola of prices and sell wine on taste, but they can’t, see, because shoppers are addicted to promotions and if we don’t do them they’ll buy their wines elsewhere.

With discount stores it’s different. They are able to sell wines at a flat, year-round price (EDLP – everyday low price, as the jargon goes) because the whole shop feels like a deal. As traditional supermarkets have lost market share to Aldi and Lidl, they’ve had to rethink strategy and have found that discount-store-trained shoppers aren’t as keen on promotions as they once were.

“We recently completed a big, six- to eight-month piece of consumer research and found that customers wanted more price stability,” says Graham Nash, a buyer at Tesco. “They want to go into a store and buy the wine they like, week-in week-out.”

As a result, Tesco has cut the price of many of its wines, particularly those under its Finest* own-label which previously see-sawed between “full price” and '25 per cent off”, positioning them at a permanent EDLP. It hasn’t ditched wine promotions altogether.


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