Home' National Liquor News : NLN APRIL 2018 Contents 10 | APRIL 2018 NATIONAL LIQUOR NEWS
WHAT IS OUR GREATEST THREAT?
When ALSA Retail Insights was launched, we were facing a growing
trend that looked like many of our product categories were becoming
‘commoditised’. Back then, it seemed like price was being used by many
retailers as their only tool. As a result, consumers seemed to be reacting
to this and only buying products that were on special. Of course, as a
retailer, it was easy to succumb to this supposed trend and ‘follow the
pack’, as price is the easiest lever to use when you think about how
to increase sales. The reality was that in fact, overall volume did not
increase and we all ended up selling the same volume – but for less
money and therefore less margin. Many retailers said that this trend was
the greatest threat to our future viability.
Fast forward two years and we have a very different scenario.
Consumers are telling us that they want to drink a bit better, even if a bit
less. We have seen significant growth in categories like craft beer – read
‘consumer interest’ and more GP for the retailer. In spirits – Australian
gin, whisky likewise and in several other categories as well we are seeing
healthy value growth. It seems that in a very short space of time, our
fortunes have changed. So, does this mean we have a bright and rosy
future full of higher GPs and less competition? Highly unlikely.
However, the other major threat we see on the horizon is the threat
around our right to trade. In recent times, there has been a real
ramping up of regulatory pressure around alcohol in almost every state
jurisdiction. Very recently, we have seen calls for a minimum unit price of
alcohol, restrictions, on places that alcohol can be advertised, and more
and more regulatory imposts being introduced – from local councils to
state governments. This growing pressure on our right to trade is arguably
now the most significant threat we all face – retailer and supplier. ALSA
identified these dynamics some years ago and has been undertaking a
strategy of engagement with all stakeholders, ensuring we have a seat at
the table wherever alcohol regulations are being discussed. It is only with
this level of professional representation that our sector and indeed the
entire industry, can speak up for itself and do everything it can to hold off
any unreasonable restrictions on our right to trade.
Of course, this level of representation is only possible if each and every
liquor store joins its State Association and we enjoy the level of support
we currently receive from our supplier partners. I wonder when the last
time you checked the ALSA website to see who those partners are – and
made sure you acknowledge their support next time you are thinking
about who you deal with?
The ALSA Retail Insights website – www.alsaretailinsights.com.au –
has plenty of worthwhile information on helping deal with all the latest
trends – from Pricing Strategy tips, to Category Management principles
and Retail Calculator tools. Many retailers report that they are getting
their staff to use the website as a form of training and have been getting
very positive feedback as a result.
One of ALSA’s important roles is to promote professional development
within the retail industry and initiatives like ALSA Retail Insights, with the
support of many of our suppliers, are a good example of how this can be
If you have any comments or questions of the ALSA Retail Insights
program, please feel free to contact Mal Higgs at mal@alsaretailinsights.
com.au or from the website itself, email@example.com.
ALSA RETAIL INSIGHTS
NT TO INTRODUCE MINIMUM UNIT PRICING
The Northern Territory Government has announced that it plans to introduce
minimum unit pricing (MUP) on 1 July, as part of the Northern Territory Alcohol
Harm Minimisation Plan 2018-19, coming from last year’s Riley Review.
The announced measure will see a MUP of $1.30, meaning that a bottle of white
wine at 12.5 per cent ABV, which contains 7.4 standard drinks will cost a minimum
of $9.62, while a bottle of red at 14 per cent ABV and with 8.3 standard drinks will
cost at least $10.79.
Fergus Taylor, Executive Director of Alcohol Beverages Australia (ABA), said that
the industry supports the majority of recommendations made to the NT Government
as part of its Riley Review, but added that MUP does not change habits of harmful
drinkers and unfairly punishes responsible drinkers.
“Broad based consumption measures like minimum unit pricing punish
responsible drinkers with big price increases but do not effectively target harmful
drinkers because they are the least responsive to price rises,” Taylor said.
“The industry acknowledges the complex issues underlying alcohol abuse in the
NT, and already imposes voluntary restrictions on prices and products as part of
local liquor accords. It is very important any trial is carefully evaluated to see exactly
what impact the new minimum price has on alcohol misuse.
“The industry supports the majority of recommendations in the Riley Review and will
continue to work with Government to engage local stakeholders in tailored solutions that
target alcohol harm where it exists, and leave responsible drinkers alone.”
The move will also see significant changes to the pricing of cask wine, with a two-
litre cask soon to cost a minimum of $27.30 .
WESFARMERS REVEALS PLANS
TO DEMERGE COLES
Wesfarmers has revealed its intention to
demerge its Coles division, with the move
subject to shareholder and other approvals.
If the demerger goes ahead, it would
incorporate Coles supermarkets, liquor
and convenience, and Wesfarmers said it
anticipates it would see the creation of a new top 30 company listed on the ASX.
“Wesfarmers acquired Coles as part of Coles Group in 2007 and since
then has successfully turned around the business and restored its position as a
leading Australian retailer,” Wesfarmers’ Managing Director Rob Scott said.
“We believe Coles has developed strong investment fundamentals and is of a
scale where it should be operated and owned separately. It is now a mature and
cash generative business, which is expected to have a strong balance sheet and
dividend paying capacity. Coles will be well positioned to continue to deliver
long-term earnings growth, with an earnings profile that is expected to be
resilient through economic cycles.”
Businesses to be included in the proposed demerger would include a national
network of 806 supermarkets as well as Coles Online; 894 liquor stores
nationally through Liquorland, Vintage Cellars and First Choice Liquor; Coles
Express which operates 712 fuel and convenience store outlets under an alliance
with Viva Energy; Coles Financial Services, which offers general insurance and
credit cards; and Spirit Hotels, a chain of 88 hotels predominantly in Queensland.
Wesfarmers also announced that Coles’ Managing Director, John Durkan,
would be stepping down after 10 years in senior leadership positions at Coles,
including four as MD. His replacement was revealed to be Steven Cain,
who moves into the role after leaving his role as CEO of Supermarkets and
Convenience at Metcash.
Metcash revealed that Scott Marshall will step into the gap left by Cain and that
Rod Pritchard would step up into Marshall’s role as Chief Executive of ALM.
The changes will also see Greg Davis move on from Coles Liquor Director
after four years, with Cathi Scarce appointed as Acting Liquor Director.
“It has been a privilege to work with the Coles Liquor team. The turnaround
is on track, we have built solid foundations and have the right people and plan
to deliver great results,” Davis said.
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