Friday, 2 October 2015

Every little less never helps

Four years ago, I wrote about how the ever-increasing beer choice in supermarkets was cutting into the market of independent off-licences. At the time, it was a valid point but, as often happens, subsequent events have gone in the opposite direction. The craft beer sector has expanded into ever more obscure sectors, most of which the supermarkets will never touch with a bargepole, even if they stock Punk IPA and Hardknott Azimuth. And there has been a big growth in independent beer-focused off-licences, often in city-centre locations, which appeal to high-spending young hipsters professionals who probably never get in to Tesco Extra.

My local Stockport branch of that particular chain was notable for its impressively wide beer and cider selection, something that twenty years ago would not have disgraced a specialist off-licence. However times have changed and, in response to the challenge from discounters like Aldi and Lidl, the major supermarkets have been looking at streamlining their operations and rationalising their ranges. Apparently 20% of all products stocked sell either one item a week, or none.

So Tesco have decided to take the axe to their beer range. One of the most high-profile casualties has been Carlsberg, as Stonch reports here, but their more specialist ranges have been drastically reduced too. Imported German and Czech lagers, Belgian beers, premium ciders, British craft beers, all have suffered. The Premium Bottled Ale range doesn’t seem to have been too badly affected, and is always subject to churn anyway, but one of my favourites, the bottle-conditioned Shepherd Neame 1698, has disappeared. Some of the shelf space seems to have been reallocated to PBA multipacks.

Regular blog readers may have noticed that I have a fondness for authentic imported German lagers. Tesco used to sell three – Bitburger, Krombacher and Warsteiner – which were usually included in multibuy deals. Not maybe Augustiner Helles or Jever Pilsner, but all very decent, palatable beers. Now all gone, along with similar beers like Baltika 7 and Pilsner Urquell. Surely a range rationalisation should have reduced the three to one, rather than scrapping the category entirely.

Obviously supermarkets have an interest in selling whatever they can sell, whether beer or bread. But the beer category has wider implications, as it is one of the factors that people will use to choose one supermarket above another (rather like cask drinkers choosing which pub to go to) and also an area where supermarkets can reclaim market share from independents. They will never remotely match the range of the specialists, but there’s a substantial proportion of customers who might think if they can get Punk IPA in Tesco for £1.50, there’s no point in making an effort to trek to the independent to pay £2.80 for Beavertown Gamma Ray.

If customers think “oh well, I’ll manage with what’s left”, then Tesco have won. But if they think “I’ll now have to go somewhere else for that”, it may seriously undermine their business. The key USP of the conventional big supermarkets is that they offer a much wider ranger than the discounters. If they cease to do that, what’s the point? Tesco have also recently annoyed me with several delistings of non-beer products.

10 comments:

  1. I haven't noticed any changes yet, but I definitely pick my supermarket based on what beers they sell. I tend to go for the 4 for £6 PBA offer or the 8 cans for £8 of ghost ship.

    Its funny, for the sake of reducing their selection by a couple of bottles, they could easily lose £50 a week each from a number of beer drinkers.

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  2. I was unfortunate enough to have to sample a so called craft beer recently going by the name of 'Punk IPA'. It was ghastly and reminded me of my long held opinion that no decent beer comes from Scotland or Wales. Stick to English beer !!!

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  3. I rarely buy bottled beer, as I find it is a far inferior product to cask ale.

    I cannot see how axing a product that only sells in single figures in a week is going to make any significant difference to supermarket profits. They may even save money from not having to dispose of out of date stock.

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  4. I am surprised they’ve ditched Pilsner Urquell. Asda, Sainsbury and Waitrose often have promotions running on this most authentic of Czech lagers. Their strategy makes little sense, and you could almost say they appear to be losing the way, but with no Tesco outlets close to where I live, it will have little effect on me.

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  5. @redNev - the point is not so much that Tesco will lose a lot on beer sales, but that beer is one of the product categories that determines which supermarket people choose, just like the cask drinker in a group will tend to choose which pub they go to.

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  6. As somebody who works in the merchandising/inventory/date checking side of the supermarket trade, I could say a lot here, but best not do in a public forum.

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  7. That there tesco annoying you by removing all that charcuterie.

    You know it was because they found the main DNA of the products was cat, don't you?

    They quietly removed the products, no need for another horsegate.

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  8. Now you've made us all curious, Matthew ;-)

    Incidentally, I see there's now a spanking new Booths in upmarket Halebarns. I might have to pop in there to see if they can provide my German beer fix.

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  9. Booths do Krombacher, Warsteiner and Bitburger. And Erdinger and Weihenstephaner if you like that kind of thing. Plenty of Sheps 1698 too.

    Also, the Beavertown is £2.25 a can there, but doubt you'll be seen in the Craft section.

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  10. didnt Tesco fall out with Carlsberg a few years back over pricing and who paid for the multi deals/discounts and pull all their stuff off the shelves for about a week or so till it got sorted? or am I thinking of another major lager brand.

    it just sounds odd if they say they are culling brands, yet will still continue to sell Carlsberg in some stores.

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