Retailers are quenching wine drinkers’ thirst for the best values with reduced prices and discounts on multiple purchases
'Tis the season to be jolly, and with discounts on purchases of six bottles of wine or more, supermarkets are adding to the holiday cheer. Grocers are also getting shoppers in the spirit by decking their shelves with tags highlighting prices per bottle when consumers spring for a 12-bottle case.
Off-premise retailers are once again taking cues from warehouse clubs when offering incentives to buy wine in bulk. Supermarkets added high-end premium brands to their sets a couple of years back to compete more effectively with members of the club channel, but now, as spending becomes more conservative, shoppers are leaning toward the opposite end of the spectrum.
“There has been a dramatic surge in demand for value-priced wine,” said analyst Jon Fredrikson of wine consultancy Gomberg, Fredrikson & Associates.
He added that growth above the $6 price point has been modest, and that a renewed focus on private labels is evidenced in a 36% increase in sales of store brands, during the year ended Nov. 15, according to the Nielsen Co.
Because the corporate-brand spurt is building on a relatively small base, much of the growth may be attributed to the availability of Fresh & Easy Neighborhood Markets' exclusive wine. The El Segundo-based chain has won nearly 60 awards for its 70 specially selected wines, which are blended with the help of a Certified Master of Wine.
Mindful of shoppers' need to scale back on holiday spending, Fresh & Easy added five new blends to its mix this November. All varieties, including Corvina-Merlot Cantina di Merlara ($8.99), Ca' Miani Garganega-Pinot Grigio ($4.99) and La Parra Loca Tempranillo-Shiraz ($6.99), are priced below $9. A new holiday promotion allows for even more savings in the form of a 10% discount on six or more bottles of wine.
“We don't think our customers should have to give up quality in order to save money,” said Brendan Wonnacott, spokesman for the chain. “Offering specially crafted wine is very important to us, since it's quite popular with our customers.”
So popular, in fact, that it outsells branded selections.
Because Fresh & Easy store space is limited to 10,000 square feet, the retailer makes holiday pairing suggestions online and with mailers, and identifies award-winning wines — such as its Big Kahuna Cabernet Shiraz, priced at $1.99 in California — with shelf tags. “Our award-winning wines sell more than others,” Wonnacott said.
The retailer has also reduced prices on single bottles of wine through Dec. 31. Its award-winning exclusive Napa Family Vineyards Chardonnay, regularly $9.99, is now $7.99; Rockcliffe Family Cabernet Sauvignon, usually $12.99, is $9.99, and Rene Florancy Premier Cru Champagne, regularly $27.99, is now $23.99.
To help encourage multiple purchases, the chain introduced a $1.99 canvas bag that holds seven bottles.
“The promotions have proven to be quite popular,” Wonnacott said.
Safeway is also drumming up excitement this season with wine discounts. The Pleasanton, Calif.-based chain rewards consumers who fill one of its six-bottle wine holders by taking 10% off.
It also recently began adding shelf tags that identify “Everyday Single Bottle Price,” “Discounted Single Bottle Price” and the much more deeply discounted “Case Price,” the per-bottle price when a case is purchased.
“Our wine promotions are very popular, especially today as consumers seek out the best prices and the best value,” Safeway spokeswoman Teena Massingill told SN.
Safeway is encouraging frugal shoppers to trade up on wine in other ways. Last year the chain introduced an online holiday meal planner that pairs wine with recipes for specific courses, and then loads them into a printable shopping list. This Thanksgiving, shoppers could pair Grgich Hills Chardonnay, Ferrari-Carano Chardonnay or La Crema Chardonnay with starters; Veuve Clicquot NV Brut sparkling wine or La Crema Pinot Noir with the main entree; and Sandeman Port with dessert.
Now is an especially opportune time for such discounts and promotions, especially since a large portion of all wine sales are made during the winter holiday months, according to Brian Lechner, client director for the Nielsen Co. He added that retailers are in a position to spur the category's slowed growth by appealing to shoppers who've scaled back on eating-out and drinking-out occasions, opting instead to enjoy wine off-premises. “As the economy gets softer, there is a shift toward entertaining more at home,” he said.
Two-thirds (66%) of fine-dining patrons polled as part of a recent Nielsen study said they're going out less often compared with a year ago; 65% of nightclub patrons and 55% of bar patrons gave a similar response.
Consumers are also sending signals about how they'd like to deal with rising input costs that are passed down from suppliers. Bulk discounts seem to be right in line with the findings of a recent Nielsen study.
It shows that nearly half of consumers (47%) would prefer that CPG manufacturers manage rising costs by offering economy-size packaging with lower unit prices. Close to one in five (17%) would rather suppliers introduce new, smaller package sizes at lower prices, and 9% suggested suppliers downsize or modestly reduce the package size of products while keeping prices the same.