Home' National Liquor News : NLN FEB 2016 Contents 88 | FEBRUARY 2016 NATIONAL LIQUOR NEWS
RETAIL & WHOLESALE
LIQUOR BARONS GROUP FINISHED
2015 ON A HIGH AFTER SECURING
BACK-TO-BACK WINS AS BEST
RETAIL LIQUOR GROUP OF THE
YEAR AT THE AUSTRALIAN LIQUOR
n many ways the Liquor Barons Group
is at a crossroads. We have been heading
down a positive path for a number of
years, with strong growth across the group,
but to really move to the next level and take
advantage of all the good work we have done
will require renewed vigour and focus.
On the surface, 2015 was another very
good year for the Liquor Barons Group as we
delivered on our promises and commitments
while making significant gains on many fronts.
For instance the number of stores under the
Liquor Barons umbrella increased by 10 to
64, and for the fifth successive year our store
margins increased. This is a healthy position
to be in and a strong endorsement of our
strategies and approach to liquor retailing.
This was recognised when the group became
back-to-back winners of the ‘Best Retail Liquor
Group’ at the Australian Liquor Industry
Awards for the third time in four years.
It was also a year in which Liquor Barons
joined Coles and Woolworths in offering our
scan data through IRi (formerly IRi-Aztec).
This is an important development for the
group, which will provide an additional income
stream while offering reliable and valuable sales
information to our suppliers and customers.
During 2015, our Bucks Off sub-brand
started to make some serious headway as a
key plank of our retail specialisation focus.
It is now well resourced with Peter Madigan
appointed as group manager, with the
appropriate commercial and support staff to
support its growth aspirations. We have been
encouraged by the level of interest in the model
from drive-thrus and beer and bourbon focused
convenience liquor stores, and we are confident
that this part of our business will grow
significantly during 2016.
An important development towards the end
of 2015, was the creation of Pentagon Ventures
which is beginning its nationally focused
activity, creating greater clout and buying
power for Liquor Barons.
During 2016, it is likely that we will see
Aldi enter the WA market, providing a number
of regulatory hurdles can be overcome. This
will certainly increase the competition for the
declining alcohol spend of consumers.
CHALLENGES IN 2016
Maintaining revenue in the WA post mining
boom economy will be a significant challenge.
Workforces in the north of the state and
those in ancillary industries elsewhere, Perth
included, have declined, taking significant
potential spending power out of the economy.
Another challenge is likely from the Coles
Liquor turn-around strategy, as it seeks to
regain ground lost to Woolworths in recent
years. It is certainly going to contribute to the
increased price competition in the WA market
with the rollout of chain destination stores.
Our significant growth has also created
opportunity with the engagement of new
people with new ideas to take the group
forward into it's next phase.
Managing supplier expectations around
margin requirements continues to be a
challenge for us. In addition, maintaining
consumer focused flexibility and innovation in
a ‘one size fits all’ trading term environment
can be difficult. What might work for one
chain might not be attractive for another and
maintaining flexibility in this engagement is
Maintaining product relevance, given the
current macro-health and well-being trend,
and the corresponding decline in per capita
spend on alcohol, is a significant challenge
facing all retailers.
The growing strength and voice of the
anti-alcohol lobby, which I have identified
previously is gathering momentum and will
clearly seek to limit our industry’s ability to
advertise, promote and market our products
We must continue our approach of
responsible marketing to encourage and reflect
community expectations for health and well-
being, and that alcohol consumed responsibly
has an important place in our modern society.
We will seek to drive the message of
responsible selling and consumption of
alcohol and be a part of a responsible industry
approach that works with all sectors in
Promotions will continue to be an important
part of our in-store offerings, but we have
found that to be successful they must be
tailored and bespoke, fully aligned and
supported by all parties and offer good value to
These promotions make good business sense
and are good for the stores, but they must be
well thought through and not simply gimmicky
– the days of cheap trinkets are over.
FOCUS FOR 2016
A fundamental focus for 2016 will be on
achieving margin growth. This is not a one
way street and will require cooperation from
all parties. It will not so much be about more
support but more flexibility in how we can
grow each other’s business.
Decisions in-store must be objectively based
on reliable information that reflect flexibility
and innovation in what is being offered.
In recent years, our business model has
involved significant investment in building
consumer brands, and we will continue to
invest heavily in this to drive more customers
into our member stores.
Liquor Barons has become an innovation
leader in the liquor industry at both a range
level and at a total customer experience level.
This will continue to be a key platform of our
growth strategy in the future.
During the year retail specialisation will
remain a sharp focus as we develop and
grow channel specific consumer brands and
use accurate information to make objective
Our key point of differentiation from the
bigger chains through focus on premium wine,
craft beer and premium spirits will continue
We will also focus on growing our digital
and e-commerce capability. We believe the
efficiencies and growth potential in this area
will contribute to our margin and revenue
88 | FEBRUARY 2016 NATIONAL LIQUOR NEWS
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