Most of us can’t resist a bargain. But are we being conned into thinking we are getting great value when we buy discounted wines from our supermarkets? The websites and shelves in all our big wine retailers seem to have a constant stream of wines on sale at special prices. Wine retailers are no longer allowed to offer quantity discounts of any kind, but they can try to tempt us with all sorts of other deals.
It is half-price wines that seem to interest most consumers. If a retailer initially offers a wine at a fair price, how can it then lop off half the price? Either they are losing money, or it was far too expensive in the first place. Some retailers might use loss leaders to entice customers. They could also haggle with their supplier for “support”, a better price for a limited period to boost sales. If a retailer is stuck with a wine that won’t sell, they might drop the price to clear their stocks. But most of the time I suspect that half-priced wines are priced artificially high to allow for those large discounts.
The margin for a wine importer (after discounts) is about 20 per cent. The average for an independent retailer is about 30 per cent. That doesn’t leave room for any great discounts. If a retailer bypasses the importer and goes directly to the producer, they can increase their margin or drop their price a little. But either way, it might explain why you don’t see many massive discounts in independent wine shops.
Overall, as a look at any website will confirm, the biggest retailers can make the most special offers. Those who also sell food and products can use wine as a loss leader in the belief that we will buy other goods at the same time. Aldi and Lidl indulge in discounting less as they argue that their prices are already at rock bottom, although Aldi is now offering two wines of the week at discounted prices.
So if most half-price wine offers are bogus why do supermarkets continue to do them? Because they work. One buyer I talked to told me that all research indicates that we, the consumer, want special prices, including half-price. Not only do they work, but sales continue (at a lower rate) when the wine in question reverts to full price. It is also true that while they may not be genuinely half-price, most of these wines are sold at keen prices and therefore do offer good value.
