What has changed in the wine aisles from 2010 to 2020?
We are still within the first quarter of the first year of a new decade, and it seems, whilst the whole world takes stock of the impact of the coronavirus, like a good time to take stock and reflect on what has changed in the supermarket wine aisle from a consumer’s perspective in the last 10 years. It’s a long time since I did a full tour of the major supermarket BWS aisles one after another, but I did just that earlier this month with the intention of fathoming out what has changed, if anything, over the past decade.
Not much has changed, but…
What’s clear is that the fundamentals of buying wine in a supermarket haven’t changed a great deal. There remains an abundance of 75cl glass wine bottles standing up on racks confronting the shopper with the main purchasing cues being price and label. Dig a little and you discover that the total number of SKUs available has shrunk by nearly 13% since 2015, but this is mainly due to some big reductions in range in Tesco (down by 39%) and ASDA (down by 17%). In the other supermarkets the number of wines has actually slightly increased. The vast majority of wine is still offered in the standard glass, 75cl format…91% of SKUs follow this format, actually up a fraction from 10 years ago.
Less is More?
One major change is in the number of promotional offers and the size of the reductions. Ten years ago there were still many half price, 3 for £10, 3 for 2 deals on the shelves, and even five years ago discounts were large with plenty of 50% off promotions to drive volume and footfall. Various macro and micro factors have meant that the promotional landscape has radically changed, whether it be government intervention on multi-buys and misleading pricing, or just consumer demand for greater clarity and consistency. Largely, deep discounts have disappeared to be replaced by periodic generic 25% off promotions across the category, or by much smaller mid/lo discounts. I’m much more comfortable with this pricing strategy as it gives the consumer greater confidence in the everyday price at which a wine sells. This must begin to allow them to make better decisions on the real value of SKUs and be able to determine the difference between wines selling at £10 and £5. This in turn should lead to consumers trading up and across the ranges.
Perhaps what is most striking when considering change over the past decade is to make a comparison with the rest of the BWS offering. Whilst the look and feel of the wine shelves have stayed roughly the same, this cannot be said of the spirits and beer assortments. The significant amount of innovation and brand development both from new and existing brands far outpaces that from the wine side, and there is a vibrancy and dynamism to the categories which still remains out of the grasp of the wine selections. Of course there are exceptions in every sense – it’s not that there hasn’t been excellent innovation in some parts, but the overall impression that the consumer must have of the different categories is stark.
Is the price right?
This leads nicely on to price points. Until I did this piece of research I could be found muttering under my breath about how supermarket shoppers were offered the chance to spend a small fortune on new and relatively unknown gin brands whilst the majority of the wine offering remained firmly stuck between £6 and £7. I think it’s hard to dispute that there is still much duplication in wine at those prices, but actually the number of wines on sale over £10 has increased dramatically across all the major retailers. In fact the number of wines sold above £10 has increased from under 10% in 2010 to nearly 25% now, and every retailer has at least doubled its offering above £10. Even taking into account inflation and duty increases, this is significant and is a really good indicator of the willingness of the retailers to embrace premiumisation in the wine category.
Sadly, although sales of wine over £10 have increased in the past decade, the growth hasn’t matched the increase in the number of SKUs. The growth has largely been in wines from traditional areas, from traditional producers with traditional labels. What has hardly happened at all is an outburst of vibrant new designs and concepts like in gin or craft beer which engage and entice younger consumers to experiment with wine. The wines are definitely out there; nearly every major and emerging wine producing country has great wines packaged in contemporary designs. It would be wonderful to see a few more given a chance to tempt new consumers in the supermarkets.