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Posted: Saturday, June 28 2008. 09:12

UK Chain French Wine Sales Zoom

A news report of significance for the organised Retail, wine importers and duty-free shops in India alike shows that the UK supermarket chain ASDA has recorded 46% sales growth of French wines by giving them additional shelf space and offering special deals on a number of premium products.

The retailer says this increase has given it an 8.6% share of the French wine market in the UK, up from 5.8% this time last year. Since April it has given more shelf space to French wines and introduced price offers on wines like Chablis, Sancerre and Pouilly Fumé.

"After tasting a premium wine on special offer, customers are returning to buy it even when it's at full price," said ASDA wine buyer Michelle King, adding, "we've also seen a recent surge in interest in Italian and Eastern European wines which, along with the French rises – have helped ASDA push overall sales up by 11.7% across our entire wine category." This bucks the national trends, where the wine market has grown by only 4.6%.

Here are the illustrative prices of some of the French wines at these stores (before the recent tax increase in the budget), courtesy Harpers:

Top Selling Reds

1. JP Chenet Cabernet Syrah 4.12
2. ASDA Extra Special Cotes du Rhone £4.62
3. Cuvee Julienne Chateauneuf £11.98
4. ASDA Extra Special Claret £4.48
5.French Connection Cuvee Red £3.96
6.ASDA Cotes du Rhone £3.10
7.JP Chenet Premier Sauvignon £4.98
8. ASDA Extra Special Medoc £5.98
9.ASDA Claret £2.98
10. ASDA French Merlot £3.13

Top Selling Whites

1. JP Chenet Colombard Chardonnay £4.11
2.ASDA Chablis £6.47
3.ASDA Muscadet £3.08
4.Sancerre Lescarpe £7.98
5.Piat Medium White £3.97
6.JP Chenet Premier Chardonnay £4.98
7. Chablis Le Donjon £7.98
8. Kiwi Cuvee Sauvignon £4.98
9. French Connection Cuvee White £3.98
10. French House White £2.59

Risk Free Buy

Not sure of which wine to buy? ASDA has an innovative idea that also helps increase retail sale and would be a perfectly legal tip even for a complex India. According to the supermarket, the concept gives customers a risk free chance of trying something new.  One can buy a 250 ml  trial bottle the price of which can be  redeemed when the full 750 ml bottle of the same wine is purchased. Prices for the trial bottles range from £1.50 to £2 with full-priced bottles retailing at around the £5 mark.

Lessons for India

It is interesting to note that most of the wines being promoted are either private labels or generic wines, except JC Chenet, a popular low-mid end French brand (importer in India- SV Distributors, Mumbai). About 100 labels out of a total portfolio of 600 are private labels for the supermarket chain.

The wines expected to take the pole position in India too are private labels and low-end value-for-money wines which every country produces in substantial quantity. The display and shelf space is an important factor which ASDA has admitted to be important too.

Duty Free Retail in India

Click For Large View
Deals, Deals Everywhere But not a One on Wine
Organised Retail is still in a state of infancy in India,  especially for wine marketing, due to complex state policies. Meanwhile, Duty Free Shops can offer an enjoyable, though impulse-based shopping experience for the increasing number of air travelers. Unfortunately, these shops at airports have no inclination or vision to create and benefit from a potentially respectable-size wine retail market or the enormous profits earned by them on liquor keep the cash register ringing anyway.

During my return from Spain after a wine trip last month, I was pleasantly surprised by the only special 1 for 1 offer I have ever seen at the Delhi airport Arrivals duty free shops-even though it was apparently a stock clearance sale.

But I was not surprised last week that the inviting and attractive liquor 'Sale' poster board outside the shop at the departure lounge had many offers (see picture) but not a single one for wine lovers.

Click For Large View
Fine Wines ?
Not Even Wines
Display of wines was only a step more discouraging. One whole vertical wine display shelf was full of non-wine beverages. Where there could be tags around the bottle neck, indicating grape varietals, region, or even rudimentary tasting notes , the bottles were decorated with undoubtedly attractive, flag tags of Italy and France from where the wines had been procured- as if the bottles were waving their flags, celebrating the National Day.

Incidentally, for our viewers who may be unfamiliar with ASDA, it is the second-largest supermarket chain in UK selling food, apparel and general merchandise. It became a subsidiary of Wal-Mart in 1999, and started opening Asda-Walmart Supercenters from 2000 onwards. Its revenues  surpassed Sainsbury's in 2003 to become number two behind Tesco. It won the Lowest Price Retailer award for the tenth year in running last year.

Wal-Mart has partnered with Bharti Enterprises in India for the back-end operations, until the present government policies allow wider participation for the FDIs.

Subhash Arora 

Comments:

 

Posted By : Andreas

June 29, 2008 3:16

"A news report of significance for the organised Retail, wine importers and duty-free shops in India"...i think it may be of significance in some years, but not right now: in Delhi and most parts of India there are only liquor shops which sell at MRP prices and they are far away from implementing this pricing and display strategies, wine importers have no control over the retailer pricing and duty free shops like "Alpha" at IGT Delhi (a UK/Indian JV) have exlusivity on liquor sales until 2010 so they don't really care about pricing and display and yes...."the cash register is ringing anyway."

   
       

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