With the rise of the discounters still firmly a factor within the retail industry, supermarket chains such as Tesco, Sainsbury’s and Asda are facing increasing pressure to compete on price. However, this battle may become slightly more difficult in the near future as discount chain Lidl is seeking to expand in one of its least profitable areas.
In order to target customers within affluent areas of central London, the discounter plans to launch a range of 48 “premium” French wines, in a move tag lined as the “claret offensive”. Consumers will be able to pick up bottles such as a 2013 Côtes de Gascogne Sauvignon Blanc for only £4.99, undercutting rivals by as much as a third.
According to sales figures, customers in all of Lidl’s main regions have purchased one million bottles of wine to date, largely thanks to the £12 million investment the chain has channelled into procuring bottles of a high quality. Should this latest strategy prove effective in central London, senior buying manager Ben Hulme predicts the next step will be to launch a range exclusively for central London which will include a 2000 Premier Cru Hospices de Beaune from Burgundy retailing at £49.99.
He says; “If a few years ago we had stocked a St-Emilion Grand Cru we would only have sold about one a month and it wouldn’t have worked.
“But internally we feel massively confident about it now; we want to be aiming at people who have not considered us before.
“The message is ‘come and give it a try – pick up a few bottles and see if you like them.’”
Lidl certainly has the space to experiment in terms of security, as in the year to July sales grew by an astonishing 22 per cent. This means that discounters, including rival chain Aldi, now control more than 8 per cent of the grocery market in Britain, which has been growing consistently in the years since 2008.
Yet despite growing success in “Waitrose country” areas such as Dorking and Maidenhead, the discounters have for the large part failed to establish a strong presence in central London. This situation, Lidl hopes, will change when those living in the capital realise discounters no longer exist solely to sell “poor food to poor people” – with the latest drive to stock premium French wines proof of the new ethos.
Mr Hulme continues; “We would be stupid to say ‘no’ to central London.
“There are challenges but if we really want to be established as a leading retailer in the UK then we have to have a presence in central London.”
Even if consumer attitudes in central London have failed to change to recognise Lidl’s new status as a market leader, French wine makers have been impressed by the retailer’s drive to stock quality goods. Should the claret offensive have a similar impact upon Londoners, Lidl’s market share could grow further as the end of the year approaches.
Do you think the claret offensive will work in central London, or is a wider range of luxury goods required?
