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Harpers independents' poll reveals growing split between performance of UK wine merchants

The findings of the exclusive survey are being presented this morning at the dedicated independents conference which has seen over 130 retailers descend on London's St Ermin's hotel.

The event is the culmination of weeks of campaigning activity organised by Harpers to put the spotlight firmly on the trading needs and challenges of independent merchants.

March for the Independents

As part of its March for the Independents campaign Harpers asked merchants to fill in an online survey which asked them a range of questions to determine key trends within the sector and pin point both the areas for opportunity and growth and where the challenges lay ahead.

It is clear from the survey how diverse the independent merchant sector is in the UK.

Whilst 30% of independents are turning over more than £1 million a year, nearly 14% are working of a turnover of less than £50,000 a year.

There is a similar gap when it comes to actual business performance. Whilst nearly 15% of independents enjoyed sales growth of over 20% in the last year, nearly 12% of merchants saw an actual sales decline up to 10%, 15% saw sales stay the same and nearly half saw sales increase by up to 10%.

Such disparities are also seen in the numbers of stores merchants own, how many staff they employ and what sort of benefits they can offer them.

The survey found:

• Some 26.4% of merchants employ no staff at all whilst nearly 10% have over 10 members of staff and 9% employ 20 or more
• The vast majority of merchants (72.5%) only own one shop with only 7% having more than five stores·
• Half of independent merchants are paying their staff either the national minimum wage or 10% more, but 16% can afford to pay their staff 20% above the national minimum wage, including 11.5% that are paying 30% more
• The vast majority, 75.6%, currently do not offer a pension scheme even though they will have to by 2018 if a member of staff over the age of 22 earns more than £10,000 a year

Online sales

The survey also looked at how independents are using online and again revealed big differences. Whilst two thirds are operating an online retail service it only accounts for less than 10% of the business for the majority 63.6 % compared to nearly 20% who rely on online for over 30% of their business.

Three quarters of merchants are running a wholesale service but whilst for 46% of independents this accounts for over 40% of their business, it is worth less than 10% for over a fifth of independents.

Price of wine in independents

The survey also looked at the price of wine in independents and found that the sweet spot for 63% of merchants was between £8 and £12.

But it also revealed that 43% of wine in independents is being sold below £10.

Supplier relations

One of the highlights of the survey is how well independents say they are working with their suppliers. Over 60% said the level of service from suppliers was either good (40%) or very good (20%). But a further 23% also criticised the level of supplier support they receive.

More worryingly for suppliers is that 75% of independents said they were now sourcing direct from producers. But for 45% of merchants this only accounted for less than 10% of their wine.

But direct sourcing is a key element of a growing number of independents' businesses accounting for over 40% of the wine they sell for a fifth of the merchants surveyed.

Biggest challenges

Finally the survey asked independents to list the biggest challenges they face. Out top at 53% was price competition from supermarkets followed by cashflow (51%), prohibitive duty costs (49%), competition from online (36%) and business red tape (23%).

Subscribers will be able to see the full research on Harpers.co.uk and the March issue of Harpers later in the week.

Today's conference

Today's March for the Independents conference features a number of seminars and debates featuring both the experiences of independents and the advice of industry experts.

It is looking at areas such as online selling, duty and bond payments, waste management costs, buying and negotiating skills, crowdfunding and finance and new business areas such as café's and wine bars.

Independents taking part include Planet of the Grapes, Hennings Wine, Borough Wines, Hangingditch, New Street Wine Bar, Vagabond Wines, Cambridge Wine, Oxford Wine Company, The Sampler, Corks Out.

The day is sponsored by partners Treasury Wine Estates, Castel, Les Grands Chais de France, Ehrmanns, Codorniu, Amazon and Alpine Wines.

There will be full coverage of the conference here on Harpers.co.uk and in the March issue of Harpers published on March 6.

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