COVID-19 Video Round Table
We’re seeing new customers. We need to hang on to them
On Thursday evening [March 26] The Wine Merchant hosted a video conference to discuss how the independent trade is coping with the coronavirus crisis.
The conversation involved David Gleave MW of Liberty Wines; Hal Wilson of Cambridge Wine Merchants; Kate Goodman of Reserve Wines in Greater Manchester; Julia Jenkins of Flagship Wines in St Albans; and Duncan Murray of Duncan Murray Wines in Market Harborough.
Our internet connection wasn’t great, so sound and video quality wasn’t good enough to upload to YouTube as planned. But we’ve captured as much of the conversation as we could, and we summarise it here.
Staying open or staying closed?
Cambridge Wine Merchants opted to reopen its branches after this week’s government clarification.
“They are actually open but with very few customers interested in coming in, and only one at a time,” says Wilson. “We are using branches as a place where people can be on their own.
“We’d been planning closures just to do some essential stock taking. We were concerned that shops everybody knew would be closed might be less secure at this time than at other times.”
Duncan Murray says: “We’ve got a guy in the office taking orders, I’ve been at the till, processing those orders, and another colleague is out delivering.
“We took the decision that it’s actually easier to police the shop when there’s just us in it, and we’re all keeping a safe distance. There’s never more than two or three people in the whole set-up at any given time. And it’s been absolutely bonkers: it’s just been like Christmas. We’re thinking we might carry this on. Who needs retail?”
Flagship Wines is concentrating solely on online orders, where the driver can drop and run, and click-and-collect sales.
For Reserve Wines, the picture is far more complex.
“It’s bloody stressful, to be quite honest,” admits Kate Goodman.
“We’ve got five sites that are all different. One is a concession and that’s part of a food hall so that’s deemed essential and is still open. But my staff there are now saying they don’t feel comfortable and they’re having problems with childcare. One suffers from asthma. So I’m having the challenge there of what do you do? You’ve got to balance commerce with ethics and morals.
“Three sites have closed because they’re in big markets and they’re not allowed to operate, so there people have been furloughed.
“The Didsbury site is small and it’s gone absolutely crazy.
“The big challenge for me is the staffing. It’s a challenge we’re going through daily. A decision you made yesterday is redundant today because everything’s changed.”
The challenge for suppliers
“Sixty per cent of our business has stopped operating, which is a bit of a challenge,” says David Gleave MW of Liberty Wines. “But it seems to be a great moment for the independents.
“It’s a challenge for us but there are always opportunities, aren’t there? We’re selling more wine into a lot of customers than we ever had in the past.
“When people change their behaviour, they don’t change back quickly. There’s going to be some changes made during these two to three months and I think it could be a really positive series of changes for the independents.
“People have gone into independents and they’ve seen that what’s on offer is good, and there’s good communication.”
What’s the wider situation in the supply chain? Do we have enough wine in the system and is more being shipped?
“The only country that you can’t get wine out of at the moment is South Africa,” says Gleave. “They stopped all orders as of yesterday [March 25].
“Obviously a lot of our sales have slowed down or disappeared, so a lot of our stock movements have done the same. We’re not having any problems getting stock here if we need it.”
A large proportion of Liberty’s workforce has been furloughed. “We’ve taken the decision that about 40% of the team have been put on furlough but at full pay, so we’ve topped up what the government have offered,” says Gleave.
“When 60% of your business goes, we need to reflect that decrease in activity with a decrease in people. It’s been a hard decision, but we wanted to make sure they weren’t economically disadvantaged.”
What merchants need from their suppliers
Some independents have expressed concern that suppliers are now going direct to consumers with deals that undercut their retail customers. But our panel of four had only praise for the agents and importers they are working with.
Duncan Murray says: “People have shrunk down the minimum orders, so that’s really helpful. All the suppliers we work with have been really upfront: ‘anything we can do, just ask’. It’s the minimum orders, particularly, that have helped.”
Some suppliers, particularly those with the most exposure to the on-trade, have been requesting cash upfront on orders, even with longstanding retail accounts.
Julia Jenkins of Flagship Wines and Hal Wilson of Cambridge Wine Merchants both point out that their businesses also have wholesale interests and so feel some of the same pressure as their suppliers.
“Some of us are wholesalers first and retailers second,” says Wilson.
“We have quite a lot of ex-cellar orders in the pipelines. We want our suppliers to bear with us … as a business we’ve got to hold on to our cash as best we can. Suppliers have been amazing so far [in the way payments are being handled] and working on a plan for the long term.”
Although he says a surge in online sales has helped compensate for some of the lost wholesale trade, the internet is “something on the side” and e-commerce is not necessarily where the company’s core strengths lie.
Jenkins adds: “We’ve had immense support and suppliers have been in touch offering assistance … it’s a matter of everyone pulling together and making the most of what we can do.”
What are consumers buying?
Hal Wilson of Cambridge Wine Merchants says: “We have large volumes of certain lines, so we started curating mixed cases, stay-at-home cases, and those have been really popular online. They’re on the front page of the website.
“It’s much easier than wandering around the warehouse for a bottle of this and a bottle of that. We’re pointing people in the direction of the stock we have, offering a discount, being more like Naked or Majestic or Laithwaite’s from that point of view. Giving people the deal. They’re going to like the wines and hopefully keep trading with us in the future.”
Reserve Wines has done something similar. “We’ve put cases together to try to make things easy for ourselves,” says owner Kate Goodman.
“Hopefully people will see we’re delivering a great service and see that the wine quality is really good and maybe think twice before they go to the supermarket next time. They might go back to that wine shop they used during the crisis. We’re trying to make it as simple as possible, because we’re not super set up for online.”
Wilson adds: “We’ve got a very large database already so when anybody places an order, we’ll check whether they’re an existing customer. But online orders have been 95% people who aren’t on our database at the moment.”
Julia Jenkins at Flagship Wines believes she could be tapping into a lucrative consumer market rather than simply supermarket overspill.
“People are at home and they’ve got time to look online, and they’re more interested in what they’re drinking,” she says. “There are going to be customers that are worth looking after and trying to put ideas in their head.”
There was a time, quite recently in fact, when independent merchants struggled to match the delivery capabilities of larger rivals. Now, many indies are finding that they are more efficient.
“We’ve never been able to compete with them because of our volumes,” says Hal Wilson of Cambridge Wine Merchants.
“We haven’t changed our standards of delivery but suddenly we’ve gone from being probably below the line to much better than many of our larger rivals.”
Duncan Murray of Duncan Murray Wines adds: “Service is key. We’ve had people coming in we’ve not seen for five, 10, 15 years and we’re getting the orders delivered same day. “People are saying the service is fantastic. So hopefully if we can carry on doing the kind of bargain price thing this will carry on, because there’s such a buzz.”
Murray has also teamed up with a nearby delicatessen and is delivering orders from that business as well as his own.
What happens next?
The four indies on our panel agree that with the wider situation developing all the time, the only approach they can take is a day-by-day one.
Hal Wilson of Cambridge Wine Merchants adds: “We’re still in the phase where it’s quite novel and next week we can’t expect the same people to come back and reorder. By the end of April people are going to be feeling the pinch. This is a terrible thing that is happening to the people that coronavirus affects so badly.”
David Gleave of Liberty Wines says there’s a general understanding that cash flow is being disrupted but companies in all parts of the supply chain are trying to be reasonable.
“We are in a moment of crisis, but at some point, two, three or four months down the road, we’ll come out of that,” he says. “It will be a different world. But restaurants will open, and people will start selling wine.
“We know there’s a crisis at the moment, and it’s a cash crisis, so if you need more time, take it. We say that to good businesses, but we’re getting the same response from our suppliers, and that’s why we can do it. The suppliers and the producers are only as good as the people who are selling their wine at the end of the line.”