Sparring partners: Big interview with Spar’s Nick Jones and Daphne Teremetz
With 2,600 shops across the UK, each designed to cater for its local market and be a community hub, Spar’s trading managers for wine, Nick Jones and Daphne Teremetz, have got their work cut out.
But with consumer spending in convenience stores on the rise, and exciting developments in food service in some stores, there are seemingly endless opportunities for innovation and development.
Jones has been at Spar for two-and-a-half years and focuses on South Africa, Australia, New Zealand, Italy, Germany and Portugal, while Teremetz has been with the retailer for one-and-a-half years and concentrates on North and South America, France and Spain. Alongside head of BWS Tina Hird and licensed trade director Chris Lewis, they oversee the drinks that go out to the retailer’s owned stores and through its wholesale network to independent franchisees.
The pair are constantly reviewing their range to make sure it remains relevant and modern, and this year introduced seven wines to its 55-strong own-label range, which makes up a healthy chunk of its core list of 142 wines. Among the new listings, Spar has introduced a Valpolicella Ripasso 2013 at £10 and £8 on promotion, to replace a cheaper basic Valpolicella which duplicated the role of other, cheaper young Italian wines.
Other wines include Verdicchio dei Castelli di Jesi Classico 2014 (£8/£6.50), Les Deux Roches Muscadet Sèvre et Maine Sur Lie and Malbec Rios de los Andes from Mendoza (£7/£6).
Jones says: “Customers are shopping everywhere and anywhere. They absolutely want that choice and quality from a local store at the end of their road, just as they would from anywhere else. We need to make sure range is relevant and offer as much choice as we can within that.”
And Teremetz says: “People want choice and to be able to satisfy any of their needs, whether they are going to a dinner party or it is a mid-week buy. They are trading up – our average bottle price is higher than for the total off-trade and I don’t think that is because of a premium on convenience. It is an opportunity to offer better quality than we have been, particularly in own-brand where we can provide the best quality possible.
“The seven wines that are now permanently listed in our national core range are wines we felt would offer better choice in terms of flavour profile, be recognised by the consumer and over-deliver on price. They are from appellations which over-deliver generally, and we are working with producers we love.”
Awards are a key part of the strategy – Spar enters all its wines into all the competitions and says medal wins give a “halo effect” that spreads beyond the drinks section to the whole range of goods on sale.
Jones says: “They really help with our message to retailers. It helps us with loyalty and recruitment because the only place they can buy these wines in wholesale is through us at Spar.”
With such a tight range and many Spar stores constrained to limited space for drinks, the retailer sticks to pretty mainstream wines and appellations, aiming to give consumers what they would expect from a compact core range in a local c-store. But they are keen to offer a decent amount of choice within that range, and to eliminate any duplication.
Teremetz says: “The ratio between own-label and branded is just right. They do over-perform versus branded in terms of wholesale, but they are a slightly lower average selling price. We are trying to give more choice at each price point.”
Jones adds: “Every year we have a formalised range review, looking at how everything is performing, what is on trend, where there is duplication, and asking if we are missing out on anything. Although we are not looking to expand or contract the range, we are making sure we always have the right lines.”
The seven wines launched recently were not part of the regular range review, but were “more urgent”, according to Teremetz. “We needed to refresh the range to improve and optimise sales so we acted more quickly with these wines.”
Jones adds: “We had too much duplication at the lower end. They were fantastic lines, really good value for customers, but we were slightly missing out on the mid-tier. ”
Teremetz joined Spar from Marks & Spencer, where she started out buying womenswear and eventually co-ordinated the retailer’s wine club exclusives.
“I studied the WSET in my own time because I’m a geek,” she says. “When the job came up at Spar I jumped at the chance. With my background in exclusive and own-label wines this is a good opportunity to take that forward, but also gives me some branded experience. And it meant moving back to bricks and mortar retail, which I was missing. Online is amazing but shops are a bit more immediate, a bit more now.”
Jones’s background lies in wine – he started at Majestic, working in a number of stores across London, before moving into buying for Spar.
“Convenience is an exciting place to be at the moment – you have more exposure to brands and you are on the front line with the customer,” he says.
The pair have been travelling the country getting feedback from retailers and meeting consumers. They attend internal trade shows for Spar retailers where they talk to the people buying their wines and can cater for their needs.
“We are also going to be at Three Wine Men so consumers can try the wines for themselves,” says Teremetz.
“There is one at the beginning of December in Manchester, where we have a good concentration of stores. We will be showing new products and existing favourites to get them out there and get customers tasting them. We are listening and getting feedback face to face so we can keep developing, stay relevant and stay modern.
“It is really exciting because we haven’t done that before. If it goes well we will plan a bigger programme.”
Christmas is a key time for Spar to encourage customers to trade up when they shop locally, with branded gift packs including glassware and chocolates alongside wines for the first time, and a few more premium wines such as Barolo, Chablis and Sancerre.
It will also have a magnum of own-brand Prosecco, which Teremetz says was a first in UK retail when it launched last year.
She says: “Christmas will be about trading up, having more premium lines and also gifting. We have developed more premium SKUs to supplement the offer for a limited number of stores. We wanted people who are a bit more engaged to have more choice in the right collections, so we are launching another 14 options priced from £8-£13.50 in 140 shops all over the country, including a Barolo at £16 and a crémant at £10.”
The targeted ranges are all about trying to ensure Spar’s diverse group of retailers each have what they need to maximise sales. Another way the retailer does that is by allowing individual shops to source products they want outside its own wholesale offer – often local products that aren’t available nationally.
For example, Spar hasn’t yet got an English wine listed nationally, although the buyers are thinking about it for the future. Teremetz says: “At the moment it is a local requirement. One of the things that is so great about Spar is that there is a lot of freedom for independent retailers to stock local products. One of the examples in BWS where it is relevant is this fantastic English wine trade that is growing.”
Jones adds: “There is a similar model in craft beer – there is quite a lot of flexibility for our stores and independent retailers to list local breweries.”
Stores are also flexible in the ways they sell. For example, the Eat 17 Spar stores in Walthamstow and Hackney offer food services such as a pizza takeaway, burger bar and patisserie. A local shop at the heart of a village in the middle of the countryside would take a very different approach.
Jones says: “We don’t have retailers, we have entrepreneurs. What they do fantastically well is to incorporate our core range of products alongside other BWS, cheese or whatever and have artisan local products at slightly more premium price points with them. They know their customers and what they want, and tailor their offer to that.”
Meanwhile, the buyers are looking six months to a year ahead to make sure they don’t miss out on something their retailers will need a little way down the line.
Jones says: “We are always looking that far ahead, because otherwise it suddenly gets to point where you have certain wines sitting about or falling out of trend in the market, and then it is already too late.”
He adds of Spar’s customers: “People are starting to look for something different along the same price levels. We are nowhere near a wine culture, but people are learning more and coming to understand more, and looking for the next big thing.”