Nicolas is dropping prices to increase sales with -5 euros on Hennessy, -20 euros on Minuty and -75 euros on Roederer…

he 479 Nicolas wine stores in France have announced a complete overhaul of their pricing policy with prices dropping anywhere from 2% to 28% on a hundred or so wines and spirits. These alone “account for 80% of the stores’ sales”, says a press statement. The commitment to its customer base aims to reposition the chain with a focus on attractive prices as a response to the current crisis in the French market where lower disposable income is being compounded by a general decline in wine consumption.

“In a bearish market, there are two possible strategies: either you focus on value by increasing prices or on volume by reducing prices. In a weakening market, the equation is simple”, explains Christopher Hermelin, director of innovation and marketing at Nicolas. Basically, the chain is preparing itself for a reduction in the number of listings in supermarkets and wants to position itself as a benchmark for affordable prices in the wine merchant space.

To date, 120 price decreases have been announced, for Bordeaux, Provence, Champagne and Cognac. Aiming to increase sales volumes by reducing prices is a gamble, admits Hermelin. He adds that price reductions are an “impactful industrial choice” deducted from the company’s profit margins: “This cannot occur at the industry’s expense. We cannot pressurise winegrowers, distillers, brewers… We don’t want to do what super/hypermarkets have done to farmers. We want winegrowers to earn a living”.