UK wine market is ‘toxic’

The trend for deep discounting in the race to the bottom has created a “toxic” UK wine market, according to one key merchant.

Speaking at a seminar during the London Wine Fair this week, Emma Shaw, head of commercial operations for Oddbins, said: “The UK market has been built around the race to the bottom with deep discounting. Before 2011, Oddbins was known for its special offers, which we sold at not fantastic margins. It’s a toxic approach.

“In our digital age if you pitch your wines at a deliberately higher price in order to discount them you are lying to the consumer and it can easily be tracked online. Also, you’re attracting promiscuous consumers who will only be with you for the discount.”

During the seminar, Shaw spoke of a less price led approach at Oddbins since 2011.

“We’ve moved away from 99p pricing as it was false. We also avoid deep discounting now. It was a scary conversation to have as we were worried about losing customers, which we did, but the discount hunters have stopped coming to us,” she said.

“Today, 60% of our customers didn’t shop with us before 2011 and we’re left with a far more loyal consumer base now as our prices remain consistent,” she added.

Shaw also highlighted how a large segment of wine retailers are failing to keep their existing consumers and are also failing to make new ones.

“The wine trade hasn’t talked to consumers properly. Wine descriptions have been dull and generic. Consumers don’t have a clue about high acidity and silky tannins. We need to think of new ways of talking to them.

“At Oddbins we’re taking a more humour-driven topical approach. The trade has failed to interact with consumers and we need to find a new and more interesting dialogue than price,” she said.