Waitrose: Alcohol duty rise ‘changes the landscape’ for BWS
The government’s alteration to alcohol duty has “changed the landscape” for BWS in a different way to the rise of cost prices, Waitrose’s wine buying manager Jamie Matthewson has said – but it is too early to tell the specific impact it is having.
Speaking to the drinks business at Waitrose’s tasting last week, Matthewson said that the duty rise provided a different element to BWS than ongoing or vintage-related cost price rises because it “doesn’t wax and wane in the same way”.
“It impacts all BWS in the same way, so it’s not like a bad vintage out of New Zealand where cost prices rise and you try and work out how are you going to fulfil that volume with the volumes available,” he explained. “This is a cost that hits everything in the range – and we simply can’t absorb that duty impact so we’ve passed it on.”
It’s still early days to assess the impact, he said, especially bearing in what that promotional cycles on individual lines have come into effect at different times. Plus because the rises were based on alcohol percentage, they have affected different sub-categories in different ways.
“It was different for fortified, it was different on sparkling and different on equals,” he points out. “So there is still some time for that to settle to understand what the impact will be for consumers.”
However he added that it was fair to say that over the last two years people are consuming less in the market overall, and that the average item price is going up, which was a promising sign.
“We have said for a long time, ‘drink less but drink better’,” he explained. “If you drink less frequently but spend more on that occasion, we think that’s a really good thing because the likelihood is you’ll get better juice. So I don’t think we’re necessarily scared of people drinking less but better, but we are constantly reminded and aware of how much people have to spend on the fixture but because it is discretionary. And so our competition – unlike some other areas in a supermarket is not necessarily from other supermarket items, it could be from Spotify or Netflix, kids’ football lessons, or whatever it might be. We’re all having to tighten our belt. And there are some things that we still have to pay or choose to have to pay like gas bill, electricity bill mortgage. So we are under no illusion that there is a lot of pressure on people with budgets”
The impact this will have on Christmas remains to be seen – whether people will want to treat themselves because times are hard or whether they will “really wrap up in the spending”, Matthewson said.
Christmas will see the return of the £10 fine wine offer, a one-off chance for customers to treat themselves. “It’s our way of giving customers something special that they otherwise wouldn’t be able to afford – and we invest in that,” Matthewson said.
The retailer also unveiled its line-up for the Autumn, showcasing 23 new wines debuting in stores across the countries and regions, and 11 online exclusives, plus five new sparkling wine and a strong line-up of fortified wines for Christmas.
New lines includes three wines from Italy, Fuori Porta Sangiovese Rubicone 2022 Emilia-Romagna (RRP: £9.99); along with a white Fuori Oirta Sangioveses Bianco Rubicone 2022 (RRP: £9.99); and Agricola Querciabella Ardalico Chianti Classico 2020 (RRP: £19.99); an American Pinot Noir, J Vineyards Russian River Valley Pinot Noir (RRP: 29.99), a Torrontes from Bodega Norton in Mendoza (£8.99); a Shiraz and a Chardonnay from Chateau Tanunda (both: £9.99) and five new sparkling wines, including a vintage Veuve Cliquot 2015 (RRP: £65.99).
“Each season or each vintage, we’re always looking to introduce newness into all of the ranges so we don’t want any of the ranges from any geographic location standstill,” Matthewson explained. The Loved and Found range, which was introduced in 2019 and retails for £8.99, “ticks a lot of boxes” for newness and pushing the boundaries, he noted, being very well received by Waitrose customers.
This season’s Loved and Found introduces a Touriga Nacional 2021 from the Algarve; a Barbera 2022 Riverina from winemaker James Ceccato; a Carignan Blanc 2022 from Languedoc-Roussillon; and a Treixadura 2022 from Galician winemaker Manuel Castro – all of which are appearing without the wine capsule.
“Our biggest challenge is that sometimes it sells a bit quicker than we would hope,” he said. And while lines may become a firm favourite, “they also want the newness, they want the next one too” he said. As a result, none of the Loved and Found SKUs [stock keeping units] have gone on to enter the core range, although popularity of particular lines have indicated where that particular variety or region – Chilean País for example – can be introduced into the core range, even if it isn’t necessarily the same wine.
No and Lo
No and low has also seen a boost – with three new products going on shelf this? Month. It follows a greater focus on no and low which was announced earlier this year, in which around 60% more space retailer was devoted to No and Lo.
“The one of the bits of feedback that we get from our branch specialists is I get asked that every day I get asked where is this section? So we know that customers find a little bit hard to find,” Matthewson explained. “We’ve rejigged some of the space to free up space for our alcohol free and low outcome and then we’ve put decals on the floor and we put signage up to make it really clear that this is where you’ll find your low and no.”
Space was taken from “adjacencies” in that particular store, he said depending on each individual floor print, he said, rather than taking space from a particular sub-category such as fortified, beer, red or white wine overall.
“In some branches there will be slightly edited range, but what you gain what you’ve lost potentially in the range,” he said.