Up until around a month ago having a premium wine business that straddled both the on-trade and off-trade was deemed to be a pretty normal way of working – a month later it is proving to be a god send. As the on-trade has collapsed and 100% only restaurant suppliers have felt the full force of Covid-19, the operators best placed to see themselves through the crisis are those with a strong retail arm. Like Jeroboams. Here its chief executive, Hugh Sturges, explains the steps it has taken.
With eight wine shops across London, Jeroboams has been able to offset the collapse of the on-trade side of its business by switching all its resources to retail.
What initial impact have you felt as a result of the coronavirus?
The first and most significant impact has been the loss of almost all of our business serving the on-trade be that to caterers, corporates or restaurants – this amounts to approximately 30% of our turnover. To an extent, but by no means completely, we have replaced this through increased off-trade sales through our shops. So overall trade has taken the brunt of the impact, private account business has been less affected so far, but with the likely delay of en primeur Bordeaux, it soon will be. Retail has done better as we have seen a pick up of transactions and order sizes in our local communities.
What steps are you taking to operate during these times?
We are adapting constantly as situations change. In retail, although there is demand and good business out there, we have reduced the hours we are open and indeed the number of shops open as well in order to look after staff as we are only letting staff work who can get to the shops by foot/bike or via Uber.
Once at the shops we are looking after staff and customers through restricted entry, distancing and card only transactions. We are also encouraging customers to order for delivery or pick up from the shops – delivery is free locally and for over 70s within the M25. All office staff are able to work from home as we are completely ‘IT’d up’ to allow that to happen. Like others we communicate often on Zoom. Most of our trade sales team have been put on furlough leave as there is no business for them to do at the moment.
Are you making any dramatic strategic changes to how you operate in order to keep on top of the impact?
We have two goals: one to keep everyone in a job and; two, to survive this downturn and be ready for business when it returns. Therefore the strategy is not to focus on sales and profit but on cash preservation and relationship building, with customers, suppliers, our staff and even competitors. We are also continuing to finesse our new transactional website that was almost ready when lockdown hit – we hope to be up and running with this very soon.
What steps do you think drinks companies need to be taking to keep ahead and cope with this crisis?
Every company is different with businesses from one man bands to giant wholesalers employing hundreds of staff. I expect that regardless of scale and market all will be looking to protect cash and the balance sheet using government help and their own resources. The exception is probably online retailers who will be busy and taking opportunity to increase business reach.
What is selling well in terms of styles and countries?
As far as product is concerned we have not much of a change actually, we continue to sell wines recommended by our staff, on promotion or peoples’ favourite tipples. It is noticeable however that order size has increased and actually we are also selling more of our speciality spirits and beers alongside the wine.
How is the supply chain to and from your business in terms of getting drinks to you from around the world and then out to your outlets?
So far we have seen minimal impact on the supply chain. Like others we will have delayed some orders where we can but are still receiving deep sea shipments as normal and the wines we need from Europe are getting through ok. As far as delivery to customers is concerned the situation is also good thanks to great work by LCB and indeed by our own staff. Although of course their deliveries to trade will have ceased so they are able, even with more careful social distancing and some staff off work, to continue a near normal delivery service for us.
How do you see the drinks landscape changing over the coming months?
The million dollar question. Change there will be for sure with positives for online, on going negatives for trade based businesses and perhaps a return to more local shopping being good for independents and community shops like ours. I think it likely that some businesses will not survive in current form and therefore there may be opportunity for others. I think that relationships between the supplier, middle man and customer will be more important than before and perhaps price not the first thing on everyone’s list.
Other habits born out of necessity might also stick, flexible working for example, and that might, just might, make businesses find that improvement in productivity after all.