The Wine Society - Annual Review
Annual Review

Overview of performance

It has been an extremely difficult year for the retail sector with several big high-street names disappearing or shutting large numbers of stores. Consumer demand is variable, high-street stores carry with them a huge overhead cost and the competition from online retailers is intense. The wine sector is not immune and only the week before writing this, it was announced that Oddbins had been put into administration for the second time in eight years. We do know that alcohol consumption per head is falling; slowly, but falling nonetheless. Delivery is a key battleground with customer expectations going up all the time, though at a substantial cost to the retailer. The challenges, therefore, are considerable.

Against this background, our financial performance remains reassuringly steady. Those aren't words that you would normally read in an Annual Review. But with a focus on long-term trends not short-term targets, and the key measure of our success being member satisfaction not an increase in share price or dividend payment, 'steady' is appropriate.

Regular sales were up by about 3% compared with last year while turnover, which is stated after adjusting for en primeur sales invoiced to members in earlier years, was up almost 9% compared with 2017/18. Cases per member were slightly down again this year and the number of active members this year was flat compared with last year. Together, this meant that total volumes sold were slightly down compared with 2017/18 but as we have seen in recent years, average case price rose again.

This year we had good cost control and no unexpected defined benefit pension charges (2017/18 £1.5m) giving profit before tax of £1.6m compared with £978k last year. We were unable to declare a dividend again this year because the profit and loss account remains in deficit, but a prepayment of cash into the pension scheme has enabled us to reduce the tax payable this year.

Cash balances remain strong but we are planning for substantial capital spend in the next few years including on the IT system, Warehouse 5 and will plan to use those balances for that expenditure.

All in all a satisfactory performance in a challenging retail environment.

Co-operating for a better Wine Society

Buying wines we really believe in

When The Society was founded in 1874 our mission was clear – to find 'wines hitherto unknown' for our adventurous members. So how do we keep our curiosity stoked and our quest for quality strong 145 years later? We spoke to the people that know.

Louisa Peskett

'In most companies the 'right' price is the highest one you can get away with!'

Louisa Peskett, Merchandising Manager

'I've been a Merchandiser for 25 years so I've seen first-hand that in most companies the 'right' price is the highest one you can get away with! But here we aim for the fairest – nearly always the lowest – price possible.

I love that some of the guiding aims of the business aren't to grow fast or make bigger profits but to reduce our margins. In 2012, for example, we performed better than expected and made more money than we forecast. This windfall wasn't squandered on dividends and bonuses, but instead we simply reduced our prices to return the money to members. It was the right thing to do.

We also want to make sure our range is a real treasure trove for people wanting to explore the world of wine. It's what we're all about! We make sure that you can discover hidden gems that you wouldn't find in the supermarket, while also giving you the confidence to explore more, whether that's a Uruguayan tannat, Hungarian kékfrankos or Greek xinomavro – as long as it respects our buying ethos of 'quality over everything'.

Sebastian Payne

'Good growers aren't in it just for the money'

Sebastian Payne MW, Buyer for Italy

'One of the things I have discovered over 30+ years of buying for The Wine Society is that good growers aren't in it just for the money. Of course they want to make a living and be respected by their peers. They also take great pride in making good wine. One proof for them of that success is a satisfied customer who returns to see them each year. Knowing that they are selling to an organisation owned and run for the benefit of real wine drinkers is an extra pleasure.

For them and for me the fact that we are owned by the people who drink the wines we buy, that we are totally independent of outside shareholders with different interests and that we are financially sound is extremely important. There really is no other organisation in the wine world quite like The Wine Society, and I have been extremely fortunate to be part of it and to work alongside colleagues who feel the same.'

Mac Forbes

'We're a community that embraces a shared love of the land'

Mac Forbes, the winemaker behind our Blind Spot range

'From our farming through to working with customers, what's non-negotiable for me is respect and an eye to the longer term. The thing I love above all else in this industry are the proper relationships built over time. The Wine Society has become the finest example of a business in the 21st century that can succeed based on respect and valuing longer-term relationships. It offers members and suppliers the opportunity to be involved in a community that embraces a shared love of the land and celebrates the great joy its delicious fruits provides us with. It's a privilege to work with you.'

Sebastian Payne

'It's great to see a younger generation of wine lovers joining The Society'

Chris Williams, Cellarmaster at Meerlust Estate, Stellenbosch, South Africa

'It is such a pleasure to work with The Wine Society, not only because of your extensive membership of wine lovers, but also because of the professionalism and deep wine knowledge of all the staff. I particularly enjoy your tastings where I can interact directly with the people who drink our wines, and it has been great to see a younger generation of wine lovers joining The Society and appreciating what we make.

Your strategy to store wines under optimal conditions for release at the peak of maturity is particularly impressive. We know you can look after our wines perfectly and offer them to the members when they are at their best.'

Bringing you the best service possible

We want to make shopping with us as enjoyable as possible, from 'add to basket' to opening the bottle. So how do we ensure a smooth ordering journey? We asked the people that make it happen…

Member Services

'A genuine connection with our members is so important'

Isobel Cooper, Member Services Manager

'I always feel so proud when we receive feedback from our seasonal workers after Christmas – approachable, friendly, fun… they're all the words you want to hear! It's important to us to foster that culture of positivity and trust within our team and to extend that same respect to our members too. That means we won't upsell you a bottle of wine, or treat a higher-spending member preferentially, and we're able to give you impartial honest wine advice because our advisers aren't incentivised with bonuses or commission. Our advisers are also funded through their Wine and Spirit Education Trust (or WSET) exams, so you can be sure you're getting great advice on choosing your next wine.

Of course breakages, traffic dramas and unforeseen circumstances mean that we don't get it right all of the time, but our Delivery Management team try to pre-empt problems before they even happen, and if something does go wrong we'll always do our best to put things right.'

Tastings & Events

'We have one of the best jobs in the world!'

Emma Briffett, Tastings & Events Co-ordinator

'The Tastings team probably interact with our members more than anyone else at The Society and we get to travel the length and breadth of the land to do it. From Truro to Inverness, Swansea to Kings Lynn and everywhere in between, it's a vital part of our role to connect and engage with members all over.

We're actively encouraged to experiment with different styles of events and to try out new themes, which help to keep the programme fresh. Until recently, walkaround tastings with or without growers and dinners have been our staples, but now we are increasingly hosting tutored tastings and dinners on a whole host of topics. Natural wine anyone? No? Then how about a tutored tasting on the Languedoc or Spain? Or a cookery course in the New Forest? The world of wine is ever changing, vibrant and fun, and it's up to us to bring this joy to our members – and to have a blast doing it!'

Digital Marketing

'We're always trying to find innovative new ways to help'

Nicky Glennon, Head of Digital Marketing

'2018 saw us make lots of changes to our website and we hope you agree that it's helped to put members at the heart of the digital experience.

We're constantly looking for ways to make the website more relevant and personalised for you; our new Wine Selector tool, which we created last year, is a great example of this, helping you to choose from our range based on the flavours and styles of wine you love at any price point. We also launched our Discovery pages back in October, with an eye to bringing you recipes, guides and grower stories in an attractive and easy-to-use format.

It's been a busy few years of change digitally. Our new member homepage, designed to be completely personalised to your needs, was launched back in 2017, the same year as our online Community, with much more going on behind the scenes.

So, are you going to see even more changes to our site in the near future? Yep! It's a fast-paced world and in order to keep our unique membership of wine lovers growing we need to keep pace with what members have come to expect from a modern website. But we're always trying to find innovative new ways to help you – and we're looking forward to taking you on the journey with us.'

Austin Foley

'If the members are happy, then I'm happy too'

Austin Foley, Society driver since 1987

'We stand for community and family spirit, which is really important when the human touch is sadly in short supply in daily life – never mind in the retail industry! Most of my members are regulars and some I have known for over 30 years. They give me their keys, recipes and tales of their families. We exchange recommendations about films, music, theatre, holiday destinations, restaurants – and yes, frequently wine! There is never a day goes by without the shine on my shoes receiving a comment and a smile.

The members I speak to love that we trust them – if they don't like a wine it can be returned without question, and this respect is reciprocated to an amazing level. Our members like a touch of class and can spot naff or 'dumbed down' at a hundred paces.

It reflects exactly why I like working for The Society; it's civilised, intelligent, friendly and unique. And of course, if the members are happy, then I'm happy too!'

Authenticity and trust

The thing about bold claims around integrity and principles is that you have to back them up; luckily that's no problem for us! new CEO Steve Finlan and Committee member Thomas Foster tell us how they keep members at the heart of everything we do.

Steve Finlan, CEO

'Authenticity and trust will see us through the next 145 years'

Steve Finlan, CEO

''A bottle of good wine, like a good act, shines ever in the retrospect,' said Robert-Louis Stevenson. So, wine, like music, art or theatre is food for the senses. The retrospect is of joy, of memories, of occasions, of friends and family. Wine accompanies these life experiences.

Championing the joy of good wine by providing members with the highest quality of wines and services at the best possible prices is our purpose. A purpose that the whole team is committed to delivering, on behalf of an equally committed membership who understand that wine brings joy to the senses, who understand that there is no better buying team anywhere across the globe and who appreciate the efforts we all go to to provide an outstanding overall experience.

I was very taken by the rigour of the Committee in making sure that I fully understood what joining a mutual organisation would entail during my interview process. Of course, I thought that I already did. After all, it is easy to find references to the benefits of mutuality. Over the years we, as a Society, regularly remind our members of these benefits. All of our employees 'get it' and this drives them every day to select the best quality and value in wines or offer the most outstanding service.

Mutuality is many things, but authenticity and trust are the two qualities I would pick out. It is this authenticity and trust that, with your support, will carry us through the next 145 years.'

Thomas Foster, Committee member

'It's an exciting time to be on the Committee!'

Thomas Foster, Committee member

'The Society has been present in my life for as long as I can remember. Like many, my father is a member and gifted me membership in my early 20s. From having grown up with household staples such as The Society's White Burgundy I was now able to buy it myself!

What I have always loved and admired about The Society is the buyers. Their exuberance, passion and individual character comes flooding across in the fantastic wines they source. It is through their guidance, their knowledge and their relationships that I feel able to buy with such confidence. It is like having your own tutor or personal shopper to support you through the buying experience!

And now I am privileged to be able to meet all of them and support the great work of The Society through the Committee. My experience over the last year has been fascinating as I have learnt more about the business, its operations and the challenges of communicating our unique position in the wine world in a rapidly changing consumer landscape. I have great confidence in the plans and work to date of the Executive Team to meet these challenges and to let the world know about the joy of The Wine Society.

It's an exciting time to be on the Committee!'

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