Northern exposure

In early March a group of wine merchants from Scotland and northern England took part in a round-table discussion, which covered a range of issues facing independents.

Our coverage begins here and continues in our May edition.

Organised in partnership with Hatch Mansfield

How has trade been in recent months?

Ray Nicholls, Ripponden Wine Company, West Yorkshire: Very positive. January and February are both above 4% growth on the previous year, which I was not expecting at all. Granted, I’m only in my second year of trading, so we’re still relatively young and I’d expect some natural growth. I’ve added a couple of elements but I was I was pretty nervous about January. In 2022, Christmas kind of rolled on through January as people did their best to get together.

Archie McDiarmid, Luvians, St Andrews: We’re in a very good place. 2022 was a record-breaking year for us. The Covid lockdown meant we had to invest quite heavily in the online side of our business. The challenge for 2022 was keeping that and developing it, and we’ve actually been able to retain a lot of that business.

We had the 150th Open Championship at St Andrews, and that’s 350,000 people visiting a town of 25,000 over the course of 10 days. That meant we posted our best single-week and single-month figure as a company that we’ve ever had.

The challenge for 2023 is to measure up to 2022 because there’s going to be stuff that isn’t happening this year.

One of the challenges we have had, post-Covid, was getting staffing back. I got it back to full staffing levels and therefore back to full opening hours in January of this year. One member of staff that we had pre-Covid is still with us. It was a baptism of fire last year. It all came out really well and we have a great team.

Andrew Lundy, Vino, Edinburgh: Probably one of the biggest things is staffing. I think sales may take care of themselves. But the biggest challenge has been actually finding people who are of the standard that we expect. A lot of the plans that we have from last year have been taken up with us covering shifts. We were really lucky not to have anyone with Covid for most of the way through the pandemic until we came out of it. And then everybody caught it and was off sick.

Graham Holter, The Wine Merchant: Do like-forlike comparisons mean anything at the moment given that we’ve had three really weird years?

Andrew Lundy: I went back to 2018-19. We’ve gone from four shops to three shops. And we’re doing the same as we did with four shops with three shops. So I suppose that is close to likefor-like but it’s not really the same. We’ve got a completely different range than we had then. We’ve increased the average bottle spend.

Mark Stephenson, Grape & Grain, Morpeth: We probably had our record Christmas this year. I think a lot of that was fuelled by the fact that we’ve moved location within the town. It was only a couple of hundred yards but I think we were up about 20% on turnover because of that move.

This year, and this may sound a bit of an oxymoron, has been steady but unpredictable. Prepandemic you could hang your hat on which days you’d see an increase, but at the moment it’s just all over the place. You’ll have a weekend in February that’s just as good as a weekend in November, which we’ve had recently. But then we’ll have a week where you were literally looking down the street and thinking, what more can I do?

I’d say things are relatively comfortable and going well. But, managing a business, it is difficult to make a decision on where you want to take the next steps because of the unpredictable nature of the market.

We’re in a market town which has seen a huge boom in tourism in the last few years, so we’re getting to the time of the year now where we’re really thinking, let’s push the accelerator down and gear up for what would hopefully be a good summer.

But you just kind of wonder how far to go with it because of how unpredictable it is at the moment. I mean, I was expecting it to fall off a cliff in January and February, and it’s actually been OK.

Richard Meadows, Great Grog, Edinburgh: I totally agree with that. It’s been quite busy. January was less shit than normal. February was pretty good.

Douglas Wood, WoodWinters: Over the last year we’ve put in two new shops so we would have expected an uptick. We didn’t lose money this January, for the first time in a long time, which was really positive.

February was down a little from January, which is a bit weird. But because we have such a diverse product mix, it can depend on the timings of certain campaigns for private clients as well ... that can make a big difference to sales, depending on allocations, etc.

Champagnes, which would come in and go straight out, can make quite a big difference too. Our retail figures are quite disparate, especially across the three different sites that we have. Inverness is picking up really nicely. It’s been going there for four or five years. Edinburgh has always been a fairly tough site for us and Bridge of Allan just keeps on getting better.

It’s important to note, if we’ve been running inflation at 10% for the last year, inflation on wine is only 4%. You do have to consider all our costs are going up. So if you’ve not increased year on year, then there’s a problem, because people expect to spend more anyway. Our average bottle price has moved up probably about 6% to 7%. For pure retail, customers’ average bottle price is about £12.

Ben Knollys, Hatch Mansfield: We get the broadbrush picture, dealing with a lot of indies across the country. In terms of like-for-likes we’re mostly comparing back to 2019. For reasons of Covid it’s less relevant looking at 2020 and 2021.

We’ve seen some indies trading really, really well and some others maybe not being quite as good as they were. There not being typical days of the week anymore seems to come from the working-from-home trend. People aren’t commuting, they’re working from home, so they can take their lunch hour and shop at their local indie on a Tuesday but that means they don’t come in on Saturday.

We’re seeing a bit of a trend that happened during lockdown when people couldn’t dine out, but instead were actually investing maybe half that money on an even better bottle of wine from an indie to drink at home. Now with the cost-of-living crisis, there’s a bit of that trend still going on, with some people possibly not dining out as much but drinking better at home.

Andrew Lundy: For us in Edinburgh, one of the things is the quality of food that you can get delivered, and little kitchens that are providing amazing food. So you can sit at home and have amazing food. And if you’ve got an amazing bottle of wine, you’re still not paying £100 a head.

Graham Holter: Some merchants in our reader survey have observed that a lot of people are moving out of the middle ground and buying £15 or sub-£10 wines, while other people are still very happy buying at the top end of the market. Is that something that rings true across your businesses?

Ray Nicholls: I’m not seeing the squeezed middle at all. If anything, I’ve taken out some of the lower end of my range that doesn’t do anything for me. £15 to £25 is the sweet spot, that’s where most of my trade comes from. I do the odd bit at the lower end; most of that I reserve for my wholesale customers. If lockdown taught us one thing, it was we know how to have a good time at home now. So if you are a little bit more resilient to recession, but you want to save a few quid, you won’t eat out twice a week, you’ll eat out once and you’ll get a takeaway and a decent bottle of wine from an indie instead. I’m definitely seeing that.

Mark Stephenson: I decided to react to the cost-ofliving crisis by putting out the £10-and-under range again, which is something we abandoned years ago. And we’ve hardly done anything on it.

Ray Nicholls: Yeah, I do have some bottles like that and I want people to know that it’s still going to be a decent bottle of wine. But I think if you’re comfortable spending £9 on a bottle of wine, you’re just going to stick it on your grocery shopping. You’re not going to make a separate trip to your indie to do that.

Archie McDiarmid: We have a dedicated sub-£10 range and it’s a big driver for us. While we still have a couple of beloved students who come in and treat Haut-Brion as a table wine, the vast majority of them are buying more inexpensive wines. What I would say is there is still wine at the sub-£10 level out there that is good, and which we’re happy putting our names behind. Our job is to be like, ‘right, we have got two rosés that are sub£10. And that’s because we’ve tried every rosé at this price from every producer that we’ve got. And these are the two that we’d actually put in our bodies’.

Andrew Lundy: We’ve got big student population that comes to us, so we have to have wine under £10. It has to be there. The next student could come in with a Louis Vuitton bag and drop £100 on a bottle of whisky. But if you don’t have that in there ...

Archie McDiarmid: … you lose them as customers. When they leave for the summer, and they want to buy a bottle of whisky as a present, they’ll come to us. If you’ve given up on them and just said ‘go and buy your sub-£10 in Tesco’, then they’re not going to come to you when they’ve got more money to spend.

One of the biggest challenges with under-21s is getting them to drink at all. As a market, the under-21s, loads of them are teetotal or are super health conscious. And then a whole bunch of them do drugs and vape. And that’s where the disposable cash goes. Drinking is not a key part of their recreational matrix.

Andrew Lundy: I don’t think [sub-£10 wine] is something that we all need to talk about. You know, it happens, it’s there; we all try so much nonsense to get to a wine that we’re comfortable selling. You either have it because you can sell it, or you don’t.

Anybody who’s got the family spreadsheet in front of them and is looking at spending and wines to cross off … if that’s where they’re at then the next step is not to come to us. They’re going to go to Lidl and they’ll find something for £5.50.

Richard Meadows: My bottle price average is probably about £8.50 to £9 because students and people drink cheap wine during the week and they’ll go for good stuff and a decent bottle of wine of the weekend.

Douglas Wood: I think there’s still a place for [wines below £10] in an independent merchant. People come in, they want to have a chat, and you will not get that service in a supermarket. If somebody comes in and they want something that’s not too heavy, and they say ‘I like Beaujolais, but I want to spend £8’ then I say, ‘try a Grenache’. You can give them that direction. And they enjoy that and enjoy that interaction. And as Richard says, they’ll then spend a little bit more, perhaps, on the weekend bottle, and so on. Going in thinking that they’re getting something a little bit better, or at least having something that suits their tastes: that’s worth two or three quid extra a bottle sometimes, rather than having something random that they don’t know. You can come to us and get something that’s actually directed towards your palate.

Andrew Lundy: For the first time in a long time, those cost increases we’re seeing are actually relatively fairly distributed across the industry. Supermarkets are having to pay the same kind of costs that we are because you can’t make glass cheaper, that’s just the price glass is; that’s just the price energy is; that’s just the price fuel is. So their economies of scale that allowed them to put wines out at £5 have gone.

If you buy an £8 or £9 bottle from a supermarket that’s been made with no love or care, you might have forgiven it when it had only been a fiver.

If you get people coming in and saying, ‘the bottle I used to buy now costs £9, have you got anything that’s better than that?’ and if I can’t outperform a supermarket on ‘is it better than that?’, I shouldn’t be here.

Richard filters. That’s what we are.