1. Home
2. Analysis & Insights

Trade talk: Thinking Independent

Have government support packages been enough?

Ted Sandbach: On the whole I’ve been very encouraged by what the government’s done. We’ve got three shops that have all received £25,000, and we’re not paying rates, we’ve furloughed around 10 staff. But, unfortunately, our wine bar, the Oxford Wine Café, which is a separate business, is above the rate level so we’ve received nothing, and it’s also disappointing with the Oxford colleges [landlords] we’ve had no concessions on rent at all.

Mike Boyne: We’ve got two shops and both qualified for the £10,000 grant, which was helpful. I was pleasantly surprised by how quickly and comprehensively the support came in. 

But our situation in Cornwall is that [lockdown] happened at the worst time of year, coming off the end of winter, when you are just limping along with cashflow, waiting for things to build up again for the tourist season. Just cracking on wasn’t really an option for us, and having gone down the hybrid model route, we are about 55% on-trade sales versus retail, so that obviously stopped overnight as well. Furlough was invaluable, but the flexibility that has been indicated, down the road in July, to start bringing people back part-time, is going to be very helpful – though it would have been more helpful if that could have been done sooner. 

In what ways have you adapted your businesses?

MB: We didn’t really do any wholesale and next to no local delivery or mail order. But, luckily, we did have an online shop, built into the website when we took it over seven years ago, so our attention focused very quickly on maintaining that, freshening it up and getting a selection of our stock up and building our local delivery network. But in terms of our turnover, we’re doing about 20% of what we would normally do at this time of year. 

Greg Sherwood MW: Our retail manager got stuck in France… and then another member of staff became quite ill and we took the decision to close the shop to walk-in trade. We then ran for a good two months full steam online, and shifted a lot of wine, mostly from our own stock in bond. We didn’t do the business or turnover we normally would, but it was quite successful.

We opened the shop again last week and we’re super-busy. We’ve a perspex screen, red tape for distancing in the shop, a limited number of people in at a time, no touching bottles, etc. Obviously with pubs, bars and restaurants closed and people just not being able to socialise properly you know they are going to drink at home and it’s a boon for us, though it’s obviously unfortunate for the on-trade. Until that opens the situation is not really going to change and that could be the rest of the year. The fact is we are achieving bigger margins because we are serving private customers. 

We know that there are going to be big storm clouds over the general economy come the autumn and possibly [through] Christmas, so we have to have a kind of grindstone mindset, make some hay while the sun shines through summer in the [independent] trade. 

Can you hold on to that new business?

TS: Around 70% of our trade is pub sales and restaurants, that’s all completely died, but the upturn through home deliveries has been amazing. We did 15 times as much business online in April as we did in December, and my overall sales figures have not dropped off, which is incredible. I believe that we can retain around 25% of that new business. 

MB: With both mail order and local delivery I see lots of familiar names, but also lots of new names – people who haven’t used us historically who are now ordering from us and repeat ordering. If we can hang on to that new business on the other side of this that would be really useful. We’re focusing on how we can deliver a level of service consistently to those people so we become, for them, the future. And for that reason we took a conscious decision, setting up a little app group of some indies that were in a similar situation, to compare notes and experiences. And we made a conscious decision to keep our range as it was. Lots of people have been really hammering out their sub-£10 wines. We did strengthen our cheaper selection, but also decided we would keep our brand consistent and deliver at a pace that we could maintain on the other side – not set expectations that we are unable to maintain in the future – to keep those new customers on side. 

Julia Jenkins: Matching expectations to what we can actually do and fulfil is important. Amazon and others have been mentioned and we try to avoid comparisons – they do have these amazing [delivery turnaround times], but we look to meet the [parameters] we’ve already set as a business. 

MB: I took the view that people who are going to order from Naked or Amazon are lost to me already, so we hammered more on what we can offer that they can’t. We focus quite heavily on interesting and quirky wines that we brought in, have a story to them, and aren’t available elsewhere. And we’ve found that people will come to us for that.

JJ: We have people complaining that supermarkets are cheaper than our cheapest wine, but we established our niche long ago and we weren’t going to compete on price. We also charge for small national and local deliveries, and we set that boundary from day one.

MB: I wish I could pretend this was a really carefully thought-out strategy, but we’ve just tried to make the service that people receive as personal as possible. We’ve tried to replicate as closely as we possibly can the experience people have when they come in the shop – in terms of the way we speak to them, the way we deal with them, the level of conversation they’re having with us – rather than it just being processing an order. Hopefully people see the value in that – there’s a personality attached to their purchase and we’ve now got a relationship.

We’re starting to see some of that creep through already from people who ordered with us in the early days [of lockdown]. They’re now giving us free rein to put a case together for them within a fixed budget, and saying just pick for me. That’s something that [bigger companies] can’t easily do.

Do you think consumer purchasing habits have changed for the longer term? 

TS: We’re actually looking at a fifth shop at the moment and it may be a good time to do it because I believe that local support is going to be key. People are going to work really hard to support local businesses. And I think we should have those discussions with new customers, as we are delivering. People say: “Oh, thank goodness, it’s great to have wine delivered.” And we can say: “Yeah, and it’s great to meet you.”

JJ: People have been forced to live at home and they’re now focusing on what is available locally to them, not just the people with the biggest voices and marketing campaigns – they are seeking out local businesses. 

GS: On the lasting effect, I don’t know how many new customers we’ve picked up, but we’ve certainly re-engaged and rejuvenated customers who may have just walked into the shop and bought a bottle. Normally there are opportunistic customers who order online, but this is a different kind of online business, because the clientele are already more engaged, more involved in the wine category. I think people will keep ordering and will keep doing interesting mixed cases, with higher uptake on offers and new things, so I definitely think it is a positive thing. 

TS: It’ll be interesting to see how this develops, because we’ve all got so many different businesses and models. But it’s going be a very messy period coming up in the next three or four months, when the restaurants start opening. We’re still owed a quarter of a million quid by restaurants at the moment, but it’s going to take them another couple of months before they give us the first pay cheque, and our vans are also delivering to all these private customers, so it’s going to take a while to settle down. 

It’s been a very good opportunity for us all to look at our businesses and see what’s worked and what hasn’t. I’ve been very much at the coalface because I want to lead from the front and I’ve learned a hell of a lot about how we operate, which you sometimes lose when you sit in an office. 

GS: I don’t believe that all this is going to suddenly go out the window when things start getting more ‘normal’, and when people return to eating out. There are many little changes in behaviour and I think customer behaviour will be permanently changed. I’m hopeful there will be silver linings for all of us. 

MB: People are now acclimatised to ordering online on a level and scale they weren’t before, and for a range of products they weren’t before. I am hopeful that we will have a part of that, and that we will have some lasting relationships with people who have found us. And that goal I had when we built the online shop, that people who come to us in the summer would think of us year round, will do that now.