Everyone’s a winner

THE retail liquor industry changed for good during the recent Christmas period.

There has been a gradual growth of a couple of big players – namely Coles and Woolworths – into an already highly competitive sector. The two big players are responsible for Dan Murphy’s, BWS, First Choice and Vintage Cellars, all large-scale liquor stores. The slow, but relentless, spread of these outlets still left enough room for the little guys – that is the smaller, independent stores – to have their share of the market and conduct a reasonably successful businesses.

Things have changed. As these two juggernauts go head to head, chasing market share, the predictable result is more stores with bigger floor space, selling more products at a cheaper price. That’s a big win for the consumer.

Unfortunately, the loser in this equation is the independent liquor store operator. It used to be that the bigger chain stores were a little bit cheaper but hard to get to. Not so any more; the little guys’ weapon of convenience and friendly service has been blunted.

It’s the gap in price that’s the most noticeable change this summer. The Dan Murphy’s store around the corner from me had Moet NV for $44.90 per bottle by the six-pack. Now consider that the cost in to store of that product for the independent retailer is $62 – that’s $17 cheaper before the independent retailer puts their mark up on the product. That is probably the most extreme example of the disparity between businesses but the point remains – the retail liquor landscape has well and truly changed.

It’s easy to jump on the bandwagon and blame the big guys, but let’s face facts – they have a proven business plan and are executing it very well. The question is, why are some small retailers choosing to still do battle in an environment of ever-decreasing margins and market share? The retailers that are thinking laterally and reinventing their businesses are the ones that will survive.

The Australian liquor industry is an exciting, ever-changing landscape; there are producers doing really exciting things with beer, cider, wine and spirits. They are mostly in it for the love of the land and their product and they all have a story to tell.

Concurrently, there is an interested public out there that wants to hear these stories, and are becoming increasingly conscious of the lineage of the purchases they make. This is the answer for the struggling independent retailer, to bring these two groups together.

Customers care about how the growing season works, what effect trellising has, soils, different types of hops – they want to know about the trials and tribulations of starting a boutique brewery or why some gins are better with cucumber.

It’s more than just a tasting on a Friday night; the retailer has to engage with their industry, strive to find and understand this liquid excellence in all its forms, then present their findings to their customers through dinners, meet the maker events, regional tastings, in-store information and informed staff members.

So if the big boys mean bigger range and cheaper prices, and the little guys strive to make their businesses better by being a conduit of information and service to their customers, then to me that’s sounds like a win for everyone