Wine ‘not cannibalising spirit sales’ for WDF
The growth of wine in travel retail is “not cannibalising spirit sales at all”, says World Duty Free Group’s UK buying manager liquor, Nigel Sandals.
Speaking at last week’s World Duty Free (WDF) Heathrow T5 flagship store opening, Sandals said that there has been a “conscientious effort to drive business through wine”, which now accounts for around 20% of the store space.
Despite the increased focus, he is adamant that wine has “not cannibalised spirits sales” in the store.
However Sandals acknowledged that the category mix is changing. Out of all the segments, Cognac has “struggled” as consumers trade into whisky or wine, he said.
The shift away from Cognac mirrors declines in Russian and Chinese passenger spend. “The challenge is to maintain as much of that business as possible,” he noted.
Generation Reseach figures for 2014 point to significant growth in the travel retail still wine category. Global sales increased by 10.5% to US$1.6 bn, overtaking Cognac which increased by 4.0% to US$1.47 bn.
On the whisk(e)y side, Sandals said that the category now accounts for 45% of WDF UK liquor sales. Around half this figure is single malt.
‘We’re trying to move people into something more niche,” he said, adding that this would increase average transaction values.
WDF’s Heathrow store now stocks more than 100 travel retail exclusive whiskies, “some of which are exclusive to us,” he said.
Japanese whisky is “absolutely flying” with the only issue being the “such small allocations”.
“We’ve grown our world whisky category three-to-four fold in the past year, but the focus is more on American and Japanese,” he explained.