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Covid and Brexit: A perfect storm?

Published:  21 October, 2020

With Covid and Brexit uncertainty pressing down ahead of Christmas, Andrew Catchpole asked some of our top 50 Best Indies what lies ahead.

Has there been any significant rise or fall in the average sale price of wine over same period last year?

Andrew Lundy, Vino Wines: There has been an increase in the average spend per head, growth of 40% with customers putting more in the basket. Wine-wise, the spend per bottle is up 15% on last year.

Phil Innes, Loki Wines: There has been a slight fall in average bottle price, down to around £17, from around £21 last year.

John Chapman, Oxford Wine Company: If anything, the lower-priced wines mainly sold into the trade have increased in bottle value as the on-trade wants to offer value and quality to attract more custom.

Archie McDiarmid, Luvians Bottle Shop: The average price dropped in full lockdown when orders were in place of people [normally] ordering from the supermarket. However, in August and September average bottle price was up as customers returned to a more ‘normal’ footing.

Are customers honing in on ‘safe’ options or continuing to be adventurous?

AL: Once we moved from door service back to having customers in the store the diversity of buying came straight back.

PI: Continuing to be adventurous, our bestselling case was an explorational case with Armenian, English and Turkish wines.

JC: The crisis has given a portion of customers more time and a little unused disposable income, which has resulted in experimental purchases in the thirst for adventure and education. The demand through The Oxford Wine School has quadrupled, harnessing online courses.

AM: The reduction in mixed cases to largely new customers has definitely moved the dial back towards more traditional offerings, but it has been really good to see some of the funkier stuff that we really got behind during lockdown keeping a following now sales are largely happening in person.

Brexit looks as if it will pile on red tape and import challenges. How will this likely affect your business?

AL: Our mitigation is with suppliers and flexibility, the pressure is on the supply chain I’m afraid. Covid has thrown such a spanner in that Brexit will be what it is and we will have to react to what presents in January.

PI: We are waiting to see what happens rather than trying to pre-empt anything. However, we always have the fall-back option of just using UK agency importers if everything does get very complicated.

JC: A bad Brexit will result in fast sourcing changes. Italy, Spain and France at the low and medium house wine levels will be the biggest causalities, with Australia, Chile and Eastern Europe being the biggest beneficiaries.

AM: We are suspending all direct importing until transport companies, wineries and ourselves have a better grasp as to the costs and timescales involved.

Will your balance of sourcing likely shift in any noticeable way?

AL: In a perfect world we will change nothing on our shelves.

PI: No. France, Italy and Spain are likely to continue being the most important categories for the foreseeable future.

JC: The proposed fallout from 1 January means there will be a shift in the ratio to non-EU wines on value for money right up the range. This could mean North and South American wines are more attractive, along with South African offerings.

AM: We currently only directly import from the EU so we hope to replace those as close to like-for-like with wines from importers if we can.

With Christmas coming, but much uncertainty, what are you planning?

AL: We started our Christmas promotion on 1 October with the message of ‘don’t wait’, encouraging customers to buy early.

PI: We are playing it very safe with stockholding as we don’t know what Christmas will look like. We are focusing mainly on UK landed stuff and ordering in smaller quantities more often.

AM: We are planning on an earlier start to our Christmas promotion and advertising to plant the seed that shopping local and independent this Christmas is not only key to a successful and surviving local economy, but that we are great value too.

What else can we expect?

AL: Consumers are in the same boat as us, the misinformation and change is constant, so confidence is fragile.

PI: I think the shift down in consumer spending is only going to get worse with people worried about jobs. We also have the situation that potentially people won’t be having as large family gatherings at Christmas, leading to fewer purchases.

JC: We are finding quality service and premium wines are winning us new customers and increasing the percentage of sales and profits.

AM: Making plans now is like tap dancing on quicksand. We are keeping our range and offers tight and rotating, but trying to be bold when suppliers bring us deals that allow us to offer the prices or unique parcels that will drive customers to purchase.