Tesco’s wine range review is Project Reset’s toughest test yet

Twitter can expect a big spike in traffic in days to come as Tesco wine customers find that dozens, if not hundreds, of their tipples have been sent to Bin 101 by Dave Lewis.

The big question for the Tesco CEO is whether the flood on social media – and more importantly what he hopes will be a similar flood of traffic in store – will be heaping praise on reduced prices and a simplified customer offering or bemoaning the reduction in choice.

Tesco’s cull of its wine range, details of which were exclusively revealed by The Grocer today, is the most obvious example yet of Lewis’ Project Reset in action and will go some way towards deciding whether he has accurately judged the mood of the nation when it comes to that complicated dynamic between everyday price and promotion.

For a start, the reduction in the number of SKUs is estimated to be twice as big as in other categories, with as much of 30% of the range coming out.

But Tesco is also promising a more transparent pricing strategy across its entire own- label and branded wine range, a move that will stand out far more prominently than many of its more subtle range reviews.

Customers will find that simple price points like £5, £5.25 and £5.50 become the norm, it said, which looks like good news for those whose wine budgets have not moved on since the 1990s. The wine rationalisation, meanwhile, complete with its major new point of sale activity, is the boldest taste test so far.

Just as there are bound to be those disappointed at the loss of particular reds, whites and roses – and those who accuse Tesco of dumbing down its range – there will also be potential resistance from those customers for whom the search for a £3.99, or buy three for £12 plonk, is part of the joy of the shop.

The key will be whether the new everyday prices on offer really do stand up to close inspection. So far things look promising, with some hefty reductions on Tesco Finest wines the early standout, plenty of which will retail at not much more than a fiver.

Today’s shoppers, whether wine buffs or not, share a strong nose for true value for money and will soon see through Tesco’s plan if they do not sense strong benefits from the reduction in the line-up. But get it right and Tesco has a prime opportunity to drive volume through the business.

Tesco is not the only major wine retailer pinning its hopes on a new strategy this week, with Majestic announcing that – following a successful trial in selected stores – it will be dropping the six-bottle minimum purchase rule across its business from tomorrow (27 October).

Like Tesco, the retailer says it is also responding to consumer demand for simpler, clearer pricing – and industry observers reckon this and the abolition of the six-bottle minimum will open up Majestic to a wider range of consumers.

“This move will helps to re-engage with lapsed consumers who probably enjoy the Majestic shopping experience but can’t always afford or desire to have at least six bottles,” said one. “This will help them capture a wider consumer audience and reward new and existing consumers.”

Suppliers and rival retailers will be keeping a close eye on the strategies of both retailers – particularly over the key festive period – to see whether they have developed fine new blends, or something best pushed to the back of the cupboard.