From 23 March to 3 April, Tesco is selling six-bottle cases of Pol Aimé brut champagne at a discount of 25 per cent, meaning that shoppers will be able to buy the luxury drink at the below-cost price of £7.46 per bottle, TheDrinksBusiness.com reports.
Although Tesco has neither confirmed nor disconfirmed that it is the case, the trade publication suggests that when a single purchase of six bottles is made, each individual bottle becomes a loss-leader.
In recent years, €5.78 has been the average price of grapes required to make a single bottle of champagne (typically Chardonnay, Pinot Noir and Pinot Meunier). Because of exchange fluctuations, this is likely to be closer to €6.94 at present.
The Drinks Business estimates that when the overheads of staff, transport costs, etc. are computed, the £7.46 that Tesco is charging per bottle as part of the Easter promotion would be lower than the cost price on a bottle-by-bottle basis.
Because Tesco has exclusive distribution rights to the drinks brand, it is a de-facto private-label product, which allows for the severity of the price cut.
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Peter Donnelly. To subscribe to ESM: The European Supermarket Magazine, click here
