Indies rock! Our guide to the top 10 Independent retailers

Reflecting the current strength of the independent trade, db has put together a run-down of some of the UK’s largest independent players.

It’s been a strange year in wine retailing. Just as the dust settles on range contractions and consolidation of major players, along comes Brexit and the endless speculation on its impact for the industry starts.

Weathering the storm may be a challenge, particularly for independent retailers – there is a certain nervousness about the future, with the majority expect prices to go up on the back of the exchange rate – but the indies seems to agree that battening down the hatches isn’t the answer.

Consolidation has been one of the notable themes in the wine trade in the last two years but for Matthew Hennings of Hennings Wine in Sussex, this has succeeded in creating an opportunity for the independent sector, which they can continue to capitalise on. “The cracks in between the floor boards become wider and there is more room for diversity, especially for companies that have regional distribution,” he argues.

Although the landscape has been more positive in recent months, the message remains the same. “We all have to remain switched on, as it is very competitive [out there],” he says.

And indies do seem to be switched on to seizing the initiative – beyond the noise of multiples’s cutting SKUs and the big mergers, a quiet and altogether more constructive revolution has been taking place in the independent sector.

United Front

Here, it is less about consolidation than collaboration. Independents are increasingly pooling resources to negotiate in buying groups, with initiative such as Vindependents launched last year to cater exclusively for the independent sector to control channel management, Dirty Dozen and The Bunch, offering not only a sourcing solution for small boutique wines, but the chance to get together with and learn from others in a similar position

Collaboration is also working across the community. Last month saw delivery company Deliveroo build on its successful foodservice venture to partner with more than a dozen independent wine shops to deliver drinks to consumers across London, a decision Stephen Finch of Vagabond Wines described as a “no-brainer”, giving incremental sales on the back of minimum effort. Although he admitted the commission demanded for this service was “monster”, an increase in competitors on the market is likely to bring this cost down, especially as they realize how valuable independent drinks merchants can prove.

Outside the Box

And it is this ‘thinking outside the box’ that is is key, according to Ruth Yates of Corks Out. “Anyone with an independent store seriously needs to consider how they will bring something else into their business and be innovative,” she argues. Waiting for consumer to come in is not going to cut it in the competitive retail environment, and businesses have to think of other reasons to get people to come in.

For Yates, the answer lies in the increased blurring off on and off-trade, as “hybrid” wine shops allow consumers to try wines through free-pour or Enomatics and linger longer over the selection. While not exactly new – Corks Out and Vagabond have been operating these models for at least six years –  they are gaining popularity, attracting retailers with higher margins and consumers because they are less intimidating than a more traditional bottle shop. Yates reports a shift in on-trade sales from 30% to 50% of turnover.

Better digital communication with customers is also likely to be key, argues John Townend, MD of House of Townend, who notes the rise of video and live streaming. “Consumers are looking to absorb information through their preferred and more convenient platforms so the trade needs to recognise that and work to develop those channels that are being effective in reaching today’s more digital savvy and busy customers.”

Reflecting the current strength of the independent trade, db has put together a run-down of some of the UK’s largest independent players, based on information supplied to us from the companies themselves, and from Companies House, where available.  Please hit ‘Next’ to view..

 

10. HENNINGS WINE

Founded: 1960

Stores: Four in Chichester, Goring, Petworth and Pulborough

Buyers: Two, but the decision-making process involves 4-5 people.

Range: 1,500

Average bottle price: £9-13

Annual turnover: £5m+ (retail: 30%, online: 5%, wholesale: 65%)

“One of the most important assets for an independent is having things other people don’t have,” says Matthew Hennings of Sussex-based Hennings wine – and as a founding member of independent-owned supplier Vindependents, the retailer is capitalizing on it by importing around 60% of its 1,500-strong wine range direct from small suppliers.

“We don’t do much in the way of brands, but the key thing is that you’re offering wines that aren’t in abundance, as the bigger boys can’t get them,” he says.

Although specialisations include French regions and entry-level European, Hennings is focusing on the unusual more and more. “We are always very keen to try new things, whether it is high altitude wine or orange wines,” he says, “and we do incredibly well with English fizz, as we’re in the thick of it here.” Another highlight is Piedmont-based Aussie winemaker Dave Fletcher, whose “explosive” Barolo, Barbareso and Langhe Rosso offers a very different style, Hennings says.

The drink-in Chichester store has encouraged people to spend more time in the shop, he notes, and online is starting to drive growth, but the uncertainty around Brexit has seen Hennings touch the brakes.

“We were looking into innovating the way we do business, but because of Brexit, we will leave it until after Christmas to decide,” he said.

 

9. VAGABOND WINES

Founded: 2010

Store: Four ‘hybrid stores’ in Fulham, Fitzrovia, Spitalfield and Clapham, two more planned

Range: 100 wines on Enomatics, from a selection of 150 “interesting, quirky and good value”

Average bottle price: £15-25

Annual turnover: £2.8m (on-trade/retail: 82.5%, wholesale: 17.5%)

 

London merchant Vagabond Wines opened its fourth site on the Northcote Road in Clapham last month, highlighting the success of the London-based hybrid wine shop/bar. “The business model works and we want to strike while the iron is hot,” owner Stephen Finch told db. And he certainly is, with a fifth site due to open in the Nova Victoria development in October, followed by a sixth at Battersea Power Station in April 2017.

Store managers have some discretion to chose which 100 wines to put on Enomatic machines from a core range of 150, and meet every six weeks as part of the buying process to discuss how the wines have been received by its customers. “It’s all about optimizing the [customers’] scoring process,” Finch explains. “If we ever start pushing what we want to do on customers, we’re losing our way.”

Its best-seller is a Portuguese red but “quirkier wines” from Bulgaria or a Nebbiolo from Australia do well when consumers try before they buy.

The wine machine that is central to Vagabond’s retailing is constantly evolving and the next level will see it dispensing with the top up card system to go fully contactless, with smartphones dispensing wine. “We want to make it easier for people to spend money,” Finch says.

 

8. CORKS OUT

Founded: 2003

Stores: 5 – Chester, Knutsford, Alderley Edge, Stockton Heath and Timperly

Buyers: Two

Range: 900 (down from 1,200)

Volume wine sales: 187,000 bottles

Annual turnover: £2.6m (retail/hybrid: 69%, online: 18%, wholesale: 13%)

 

Ruth Yates of Cheshire-based Corks Out acknowledges there may be choppy waters ahead for pure-play retail, especially in the wake of the Brexit decision, but for her, the future lies in the drink-in-store hybrid model. “It is the way forward in terms of bringing people in to drink, as the margins in retail are not just not strong enough to copy with the duty, overheads and taxes. And we shouldn’t be afraid of making a margin,” she insists.

The model has been a key driver of Yates’s business, along with strong online sales (now 18% of business), 80% of which come from London, the South East and Scotland.

Champagne has been another success, up 96% year-on-year with Spanish wine seeing growth as people increasingly look beyond Rioja. But it is the often overlooked Portuguese section Yates is most pleased with, seeing sales up 70% on the back of renewed focus.

However Chilean and Burgundy wine has fallen “substantially” over the last five years. “If people are spending £20-25 on a bottle, they don’t want a Chilean wine, they’ll spend it on an Oregon New Zealand Pinot Noir or a Bordeaux or a decent Chablis,” she says. “And Burgundy (excluding Chablis) has dropped “dramatically” as customers view it as poor value for money.”

7. BOROUGH WINES RETAIL LIMITED

Founded: 2002

Stores: Eight – Borough, Hackney, Dalston, Stoke Newington, Kensal Rise, Clerkenwell, Hoxton & Islington, plus a wine and book shop franchise in Hastings

Buyers: Three

Range: 450, specialising in France and “quirky” wines

Average bottle price = £11.50 – £12

Volume wine sales: 250,000 bottles (including kegged wine sales)

Annual turnover: £3m (retail: 55%, wholesale: 43% and online: 2%)

 

Borough Wines opened its eighth shop, a contemporary ‘glass box’ in Islington, in May, but three more are already scheduled to open before the end of the year, along with a franchise in Newcastle, as it seeks to widen its base.

“The reason is not to sell more volume, but because the world of retail has changed,” owner Muriel Chatel explains. “It is more about working with different communities and having community platforms where you can really engage people.” This means creating a “web” of small business (coffee business Climpson & Sons, and micro-distillery Butlers’ gin operate from the Islington store alongside pop-up events) to gives customers more reasons to come through the door.

The range is tight at 450, but regional depth is added by rotation – 50 wines from the Languedoc went on shelf recently, and 30 new Californian wines will launch in September. Chatel is proud of its natural wine range – a challenge to source as consumer want wines that are typical of the appellation and affordable – but the star buy remains its house wine that are refillable from the keg, which makes up 15% of sales in the shops. “It’s brilliant to able to supply quality house wines at a good price, it is a bit like a baguette in the Boulangerie, people pick that, and then they choose something else as well,” she explains.

6. BOTTLE APOSTLE

Founded: 2009

Stores: Five – Hackney’s Victoria Park Village, Crouch End, Clapham, East Village and Primrose Hill

Range: 600 wines, 120 spirits and 100 beers

Average bottle price: £16

Volume sales: 2m+ bottles

Annual turnover: £3m+ (bricks & mortar: 80% devoted, online: 10%)

 

Increasing the range of direct-from-producer wines is a key focus for London-based independent Bottle Apostle over the coming months. Currently, there are 40 direct and 8 exclusives among its 600-strong range, but marketing manager Miranda Fong says it will extend this “any chance we get” now that it has reached a critical mass of five shops, in order to ensure customers have a unique offer.

Currently, the top-seller is a rare Puglian wine from Cantine Sampietrana, but the retailer is thinking outside the box, stocking 35 sakes as it looks to become the go-to shop for premium sake. “There isn’t an adequate place to explore a wide range of sakes in the off-trade,” Fong explained. “We want customers to consider sake just like any other wine pairing.”

Online is also set to more of a priority than physical bricks and mortar expansion, with Fong describing the website as the retailer’s “sixth store”.

“It’s not just growth we’re after but rather an integration of our shopping experience on and off-line,” she explained.

“Our aim is to bring the same service we offer in-store to everyone’s screen. Customers will be able to order with a few clicks on their mobile, tag favourites, wines for future reference and find wines to pair with specific foods.”

5. THE OXFORD WINE COMPANY

Buyers: Five key decision-makers

Stores: Two shops (Standlake HQ and Botley Road) and two wine cafés (Summertown & Jericho)

Range: 2,200, plus 750 spirits, including 70 gins, 50 rums and 200 malt whiskies

Average price: £6-7 a bottle

Annual turnover: £4m (30% retail, 70% wholesale) plus £1.25m from the wine café business.

 

Ted Sandbach has been selling wine in Oxford since the 1990s, but the business has constantly evolved.

While the newly revamped pure-play shops remain an important “showroom” for the extensive 2,200-strong range, Sandbach admits expansion can have its downside, and having closed the Cirencester “outpost” in December, he has concentrated on its Oxford heartland, in particular its USP wine café concept.

He opened the first three years ago in Summertown, followed by a second in Jericho last October and two more are in the pipeline.

“Rents are high and staffing is difficult, so we’ve changed our emphasis as wine bars and cafés are a more profitable area and easier to manager,” he told db.

Doubling online sales is a key target and Sandbach is keen to see it grow. “Ten percent of the business would be great,” he says.

 

4. CAMBRIDGE WINE MERCHANTS

Founded: 1993

Stores: Seven – Cambridge, Royston, Ampthill & Salisbury

Buyers: Five wine, one beer and one spirits

Range: 1,500 wines, focusing on Languedoc-Rousillon, Bordeaux, the Loire, Spain, Italy, Australia and New Zealand.

Volume sales: 240,000 bottles

Annual turnover: £5.4m excl franchises. (‘straight retail’: 50%, 50% wholesale & private client)

 

There’s nothing hard about buying well-known, expensive wines, but according to Cambridge Fine Wine Merchant’s owner Hal Wilson, it doesn’t make for an interesting range. The regionally strong retailer, which has its own warehouse and dedicated logistics team, instead focuses on unearthing “pioneers” that can be imported directly.

“There is lots of value to be found in pretty premium regions, rather than taking the bizarre or the over-esoteric,” Wilson says.

Working with other independents helps, as buying pallets or under-bond allows it to meet margins and offer more competitive pricing, while pre-shipments from private client in Cambridge College allows it to offer fine wines to retail customers – a virtuous circle, Wilson says.

“If we were buying those in the UK, we’d struggle to get them at volume and wouldn’t be able to offer great value for money. But we can offer customers some very good wines partly because we’ve pre-sold a pallet or two along the way,” he explains.

Franchises are the key to expansion and Wilson wants to double the number from three to six in the near future, as well as more wine bars to “keep relevant”.

 

3. LEA & SANDEMAN

Founded: 1988

Stores: Four – Fulham, Barnes, Notting Hill and Chiswick

Buyers: Three

Range: 2,000, with around 1,050 offered online

Annual turnover: £8-9m (retail: 30%, online: 5-6`%, en primeur 25%, wholesale & private client: 40%)

 

Continual sourcing of new wines is a driver of increased sales for London-based merchant Lea & Sandman, who opened its first branch in Fulham nearly thirty years.

According to co-founder and director Charles Lea, the range has always been about “wines with drink-ability” that leave you wanting another glass. Balance, he says, is key, and more easily found in Europe than elsewhere.

The best-selling product is a MiP* Rosé from Domaine Sainte Lucie in Provence, and Bordeaux is popular, along with Italy and increasingly Spain. The Maquina & Tabla and Artuke wines for example, represent “everything that many people least expect from Spanish wine – whites with complex aromatics but real flowing lively freshness, and reds that have juice and definition,” Lea says.

Online has been a key driver, Lea notes, with web sales up 20-25%, supplemented by a growing wholesale division and along with its wine club and en primeur sales, accounts for 60% in total. Meanwhile bricks and mortar sales account for around a third of the business.

 

2. ADNAMS

Stores: Thirteen across Norfolk, Suffolk, Essex and Lincolnshire

Range: 600, including 45 own-label.

Average bottle price: £8

Wine volume sales: 502,000 litres

Retail business turnover: £11m, including online, and mail order (wine: 45%, beer & spirits 30%, accessories: 25%)

 

Although best known as a brewery, Suffolk-based Adnams has thirteen retail outlets across East Anglia and the South East, with wines contributing 45% of retail sales, or 15% of its overall business. Retail is going from strength to strength, head of retail Neil Griffin says, and there are plans to expand further at the end of the quarter.

The range comprises 600 wines (412 available online) and specialises in classic France (its long-standing best-seller is a £9.99 unoaked white Burgundy) with new wines introduced on a quarterly basis.

A big focus recently has been its 45-strong own label range, which saw the addition of a varietal-led entry-level tier, Great Grapes, that has been “flying”, according to Griffin. A tier of premium regional wines is set to hit shelves in October, and Adnams is also looking to add an own-label English wine and low alcohol wines from Forest Estate in New Zealand.

Stores have long had a tasting bar, but additional tasting stations have been dotted around to get people sipping more, and it is exploring food matching, from pairing in its Southwold café to upmarket snacks. “It makes it more fun and less of an old fashioned wine shop. It’s about getting people to experience it,” Griffin said.

1. TANNERS

Founded: 1893

Stores: Seven – Shrewsbury, Chester, Bridgnorth, Hereford, Welshpool and Llandudno

Buyers: Three

Range: 1,200 core lines, plus 800 fine wine and small parcel ‘oddments’, most of which are shipped direct

Volume sales: 2m bottles

Annual turnover: £18.7m (retail: 25%, mail order & online: 25%, wholesale: 50%)

 

Shrewsbury-based merchant Tanners has been busy on the retail side over the last 18 months, after opening a large store in affluent Chester in September (“That was a big thing for us,” md James Tanner admits), as well as the hybrid outlet Taste of Tanner in 2014, situated at its Shrewsbury HQ and flagship store, which comes complete with courtyard seating area and jazz.

Although Tanner anticipates growth of the hybrid model, he says clearer distinction between a traditional wine merchant shop and one that offers Enomatic pouring an on-trade offer are likely to emerge.

“In terms of pouring wine and providing a nice drinking environment, the specialist shops are a very different thing to the natural nuts and bolts of selling and retailing bottles of wine,” he said. “It was our way of separating out the wine tasting from the main retailing area.”

Bricks and mortar contributes 25% of the overall turnover, with mail-order and ecommerce making a further 25%, but the relaunch of a mobile responsive website in October will see online become a bigger focus, as Tanner taps into changing consumer habits.