Despite massive investment in promotions, sales of Champagne actually fell this Christmas.
With multiples selling Champagne for as little as £9.99 over the festive season, volume sold on deal rose one point to 76% this year, according to Nielsen.
But as retailers including Asda, Lidl and Tesco reported booming sales of Champagne and other sparkling wines, Nielsen data showed overall festive sales of Champagne fell 9.1% by value and 9.6% by volume year-on-year [8 w/e 29 December 2012]. Meanwhile, sales of sparkling wines such as prosecco and cava had grown 8.3% in value and 7.4% in volume.
Morrisons admitted Champagne sales were down year-on-year, although its other sparkling wines had performed well.
Morrisons wine trading manager Andrew Turner said promotions on grande marque Champagnes in particular had underperformed compared with 2011, and Nielsen also noted a shift away from big brands towards smaller names on deal.
Industry insiders also questioned whether Champagne had become a loss leader for some mults. The average price of Champagne fell 5% year-on-year in December [BrandView.com], while the number of promotions offered on Champagne rose from 80 in December 2011 to 99 last December.
Asda cut the price of its cheapest Champagne Brut from £23.98 to £10 - bettered only by Lidl’s £9.99 - while Tesco and Sainsbury’s were selling a bottle for £12.
Asda insisted it would never sell Champagne as a loss leader and reiterated its commitment to sell alcohol for at least cost plus vat and duty.
But Mintel senior drinks analyst Chris Wisson said the profit on a £10 bottle of Champagne was “negligible”, and any incremental volume growth would not be sustainable.