Off-trade: 'ferocious' Christmas business on cards

Published: 10 December, 2012

Retailers battling for share in the off-trade are going to get "pretty damn ferocious" in the run-up to Christmas, while difficult conditions mean the industry is approaching 2013 with caution.

Suppliers and retailers said it was too early to predict how festive sales will go, although most seemed quietly confident that consumers would still celebrate and spend.

Steve Barton, joint managing director of Brand Phoenix, said promotions are "going deep and early". He predicted Champagne will lead the way this year and wine will be important for footfall.

Overall, trading will "get pretty damn ferocious" and will kick off in earnest this week. Looking ahead, Barton predicted a further 10% drop in volumes over the next 48 months. That said, he "wouldn't be surprised to see quite a robust January".

Free Run Wines' Nicolas Bauer is expecting a lot of "very aggressive offers" and a price battle on Champagne across the Big Four supermarkets. But the trade would have to wait and see if "Christmas delivered" before predicting how 2013 will shape up.

Nick Mantella, managing director at Grupo Codorníu UK, urged caution. "My concern, and retailers', is how do we keep sales going and stay profitable? How do we do that next
year facing a duty increase?"

The shortage of wine, he warned, will impact early in 2013 as cost increases begin to take effect. "We're caught between a rock and a hard place with rising costs," he said. But he added consumers would continue to buy, and was hopeful the trade could avoid a collective "rush to the bottom and price fighting too quickly" over the Christmas period.

Nielsen's Helen Stares predicted continuing volume sales declining in all major categories across BWS, "as there is no sign of the price rise reversing" in 2013. She believes retailers will plan in-store activity around events, and sees opportunities around lower-alcohol products and the convenience sector.

Benoit Thouvenin, managing director of Spirited Wines, said he is confident about Christmas trading in its 52 stores, predicting December sales will double an average month.

As for the independent sector, the picture is mixed. Toby Peirce from Brighton-based Quaff said he is "cautiously optimistic" about Christmas, but isn't thinking about January. "It's a time to take holiday. We are hoping to have a couple of new restaurants on the wholesale side and we may have a bin-end sale in the new year. But if you haven't got January covered in December, you're buggered," he said.

Ruth Yates, owner of the five-strong Corks Out chain, said she was "feeling very confident that the retail side will do very well, providing the snow stays away". As for 2013, given Corks Out's luxury niche, she believes that most of her customers "have the disposable income to continue purchasing".

To get the full picture of what's happening in the trade this December, see this week's issue of Harpers.

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