Sainsbury used the description for its cheap Carling deal in December but other retailers say this was overdramatisation and that the tactics used by the major players were just part of normal trading. Nevertheless, the cash and carries and independents were struggling to compete with the multiples and find Christmas offers that attracted consumers. Stella Artois maintained its place as the most profitable brand in the business but its rapid growth slowed dramatically and Interbrew acknowledged its disappointment over the brand's performance during this critical eight week period. It was a victim of the cut-throat pricing on the major standard lagers. This, in turn, helped Carling and Foster's build impressive volume and value growth. In the spirits market Baileys continued its strong growth helped by keen pricing on its litre bottles, and the New World wine brands continued to outpace the rest with the best performance coming from Percy Fox's Californian range Blossom Hill. It is still a long way behind Jacob's Creek which increased its value by 20% thanks to comprehensive promotional activity. All the established drinks categories were eclipsed once again by premium packaged spirits which continued to take share from all of them. But there are signs that this growth is not unstoppable as the market leader Bacardi Breezer lost value over the period and the high flyers in the category were Beverage Brand's WKD and Coors Brewers' Reef. Sainsbury's wine director Allan Cheesman says the figures show the multiple outperformed the sector and this was done by a focused offer with keen pricing. It was a particularly well thought-through package which was carefully calculated and not a knee jerk reaction to other people. It was also well implemented at store level. It was the best supply chain planning we have ever had and this has given us a clean restart in the New Year. "Some of the figures were skewed by the deals that were available: if you cut £5 off a litre bottle of Baileys it will always sell well. But despite the cuts there were some clear signs of trading up. Our classic selection of wines between £5-£10 were very successful and branded champagne went down well, even at £18 a bottle." Cheesman sees no end to the price discounting. "This was my 30th year in the business and nobody ever puts up prices. It is part of the psychology of shopping. I would love to put them up but the rest of the trade would just take the advantage." Instead the chain did the reverse and introduced the supercheap Carling packs. "Category killer deals like this were successful and generated loads of positive publicity." But Asda's marketing manager Gareth Roberts branded this as overkill and hype. "Everyone wants to be seen to be the best value, this is just one way of doing it. "We work hard at that and do particularly well at Christmas by focusing on what is important to customers. This means having the right brands and knowing what prices they would like to see them at." For Asda this included three for £10 deals on leading wine brands such as Blossom Hill and Jacob's Creek Semillon Chardonnay, bringing down the price of its own label Chablis and offering premium packaged spirits at five for £5. The retailer also brought branded champagne below £15, own label fizz to less than £9 and cava to under £3. Roberts says: "We outperformed the market hands down." It also introduced bigger packs (eights and 12s) for the pps sector and plans to continue using them throughout the year. Roberts says: "The beer market was more competitive than usual this Christmas but we maintained the best value overall. Our perception data shows our consumers understand this and the stores have become a key destination for people buying beers, wines and spirits at this time." One of the key lines for the retailer was the Stella 24 pack and Roberts says: "It is almost impossible to go wrong with this if it is at the right price and availability is maintained. The success of our performance was due to the fact that we kept the product on the shelf. "This is the result of work using Wal-Mart systems for store and depot replenishment. People look out for the best deals in November and December. Hopefully those who came to Asda then will stick with us for the following 12 months." The cash and carries and independents are less enthusiastic, however. Landmark trading controller Kevin Thistlethwaite says: "We got hammered on beers because the multiples started so early and the market was devalued before we moved into it. We need constructive responses from suppliers about this situation because the success of many independents is geared on how they perform at Christmas." He estimates 40%-50% of their beer sales take place in the final quarter, but when the multiples do what they did they are terribly exposed. Overall the group's beer volumes were up, but he said members had to trade at the expense of their margins. "We are now analysing our data and it is not making pleasant reading for beer, although in wines and spirits we did very well. Consumers like our own brands and will buy them if the price differential is there, but how long will that be for? Our own label beers were affected by the price cutting because Carling was cheaper. This trade channel is important to the brewers but it is becoming less and less profitable for retailers." He warns: "The brewers say we should concentrate on multipacks but the prices are not competitive with the multiples. Some of our members have had to lose money on the big brands just to keep customers coming through the door." {{FEATURES }}

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