Indies are defiant despite challenges

ArticlesReader Survey 2023

Independents remain upbeat about their prospects in the coming year, despite confidence – and, in many cases, sales – taking a knock.

This year’s Wine Merchant survey involved more than 200 businesses who shared information about their performances in 2022 and hopes for 2023.

The proportion of indies feeling gloomy about the year ahead has hit a new high, with 13% saying they are fairly pessimistic and 2% saying they are very pessimistic. But 12% remain very optimistic and 39% are fairly optimistic, the survey found.

Almost four in 10 indies report a decline in sales over the past year – about the same proportion as those who saw an increase.

Average turnover per business now stands at £863,413, according to the survey, though this figure is perhaps higher than the true average as it includes some responses from larger independents with big wholesaling operations. The median average figure, of £550,000, is probably more representative.

Wine in all its forms contributes about three-quarters of indie turnover. Just over half of revenue is generated by walk-in trade, with wholesaling, online sales and drinking-in contributing most of the remainder.

The average price of a bottle of still wine in the independent trade has risen 60p, to £15.70, compared to a market average of £6.35. But basket spend is down by 41p and now stands at £52.20.

Almost half of all indies are now hybrid shops and bars, restoring a trend that had been derailed by Covid.

The survey, which is organised in partnership with Hatch Mansfield, reveals that Italian wines are now leading the way for indies both in terms of the interest they generate and the sales they achieve.

Jefferson Boss of StarmoreBoss in Sheffield says: “This year feels like it will be tougher than last year for trading, the main factor being the price rises across all sectors of the business, but mostly the increase in prices of the bottles on the shelves versus the stagnation in wages.

“We’ll have to look at the range closely and adapt our offering according to the market and look to find more inventive ways of supporting our revenue streams and adding value to increase sales.”

Nathaniel Carpentier of Dalling & Co in Kings Langley believes indies can create business even in a cost-of-living crisis.

“We are optimistic that retail can bridge the gap where on-trade sales fall,” he says. “Going out will likely be one of the first budget cuts families make, opting for a more budget-friendly staying-in. A wine that is a treat at a retail price point is substantially less expensive than a completely average wine at any restaurant. Educating customers that they can get more for less at home will be a key campaign this year.”

But many indies have also been sounding a note of caution. “At the moment we are really not sure what impact the current economic climate is going to have on our business in 2023,” admits Paul Tate-Smith of Derventio Wines in North Yorkshire. “We know we are going to have to work hard to deliver value and quality to our customers.”

Stefan Botfield of The Wine Cellar in Woburn adds: “We plan to grow as a business this year so therefore should see increased sales, but I’m not sure, over and above inflation, that we would necessarily expect our sales to increase per store.”

• Survey analysis begins in the March issue and continues in our April edition.

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