Falling consumption and squeezed profits could mean less space for wine on supermarket shelves in the UK, says Bibendum buyer.
Supermarkets will come under greater pressure to justify the amount of shelf space given to wine, according to Andy Shaw, head of buying at merchant house Bibendum.
Britons will drink almost 4% less wine in 2016 versus 2012 forecast figures released by trade show Vinexpo and research group The IWSR this month. Only sparkling wine sales will increase, but this represents less than a tenth of the market.
Adding to the pressure, repeated duty tax rises and tightening global wine supplies are making it tougher to sell wine profitably at low price points. Last year, tax pushed the average bottle price above £5 in the UK.
‘There’d have to be a very good reason not to reduce the amount of space dedicated to beer, wine and spirits (BWS),’ Shaw told Decanter.com on sidelines of Bibendum’s annual tasting this month.
‘If it comes down to straight finance, BWS is a margin diluting categry for multiple retailers. I would subjectively forecast that we’ll see a reduction in space; that’s if we don’t see legislation that says wine has to be at the back of stores, or behind bars, or in a separate shop completely.’
Shorter supermarket wine aisles may boost ‘proper wine shops with trained staff, sellng more premium products on a more genuine value message’, Shaw said.
Bibendum, which supplies a myriad of restaurants, independent retailers and some supermarket stores, is investing in a smarter approach to wine sales, via a consumer profiling system called Prospects.
‘We’ve analysed the demographic profile of the UK,’ Shaw said. ‘If you wanted to set up in Carlisle, we can tell you how many customers would buy a £15 Shiraz in Carlisle.’
Many wineries still want to sell in the UK, said Vinexpo chairman Xavier de Eizaguirre. ‘It’s still a very key market in terms of image and prestige,’ he said. The UK remains the world’s biggest wine importer by value.
Written by Chris Mercer