David Williams: don’t discount the discounters

on 06 November, 2015

It was during my first visit to Prowein in 2000 that I first came across the idea of discounters.

To judge from the tone of the winemakers and journalists I spoke to back then in Düsseldorf, the stripped-back bargain supermarkets were the bogeymen of the German wine business. The emphasis always seemed to be on that sibilant first syllable, almost a hiss – ‘dissss-counters’. They were a curse on all who dealt with them, responsible for depressing prices with depressing wine.

Both Lidl and Aldi were already in the UK back then, Aldi having opened its first store in 1990, Lidl in 1994. But I don’t remember them being talked of as ‘discounters’ as such, more as a kind of slightly exotic, if unglamorous, curiosity. They were a place to buy surprisingly good, cheap charcuterie and budget bog-roll. But their presence was tiny, and they were certainly not perceived as much of a threat to other wine retailers.

In fact, at that point, and for much of the following decade, the mainstream supermarkets were the subject of most concern on the supply side of the British wine trade. The collective might of Tesco, Sainsbury’s, Asda and Morrisons had strengthened its hold on the wine market to a mighty 80% and counting, leaving a trail of failed specialist wine chains in its wake.

But not any more. Now that same, slightly fearful ‘diss-counters’ I heard repeatedly back in 2000 is the soundtrack to many a supermarket wine buyer’s presentations and sleepless nights. The success of Aldi and Lidl has been eating into the Big Four’s profits for some time now. But it’s only really during the past two years – when the discounters have set about wooing the middle-class with increasingly interesting but keenly priced wine ranges – that the traditional British supermarket wine departments have begun to worry.

The fear among many in the trade is not only that the discounters’ success has sparked a race to the bottom in terms of prices, with a significant upturn in wines selling below both £3 and £4. It’s also that the discounters’ success is having a pernicious effect on the one quality that used to set British supermarkets apart: depth and diversity of range.

Even with the improvements that both Lidl and Aldi have made to their ranges in the past couple of years (from remarkably good sub-£10 champagne to impressive £20 clarets), their modus operandi remains small and flexible with ranges of dozens rather than hundreds of wines. That their customers don’t seem to mind has led the Big Four to move in a similar direction, cutting back on lines like an austerity-crazed finance minister.

How worried the trade should be by this development is a moot point. In my view, it depends on where the axe falls. For too long the supermarkets have offered an illusion of choice, with bloated ranges of me-too bottles. If the success of the discounters reminds them they don’t need 10 near-identical Kiwi Sauvignons, I can’t see the problem.

The evidence so far, however, suggests that it’s the more esoteric and interesting (but difficult to sell) lines that are for the chop. That may be good news for the UK’s independent wine merchant scene, mopping up customers looking for something other than cheap plonk. But for the supermarkets, it’s just another signal of how far the mighty have fallen.  

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