By Shane T Williams
Mal Higgs led a small delegation of Australian liquor retailers and suppliers to New Zealand for four days in October for the first ALSA Retail Liquor Study Tour of Auckland.
According to Higgs, the Study Tour is designed as a way to challenge the way retailers think.
“The ALSA Study Tour program is designed to encourage retailers to share ideas as well as challenge their thinking. Of course, having suppliers involved allows an even more productive discussion, as we can talk more about what we can do together,” he said.
In a packed four days of seminars and store visits the group discovered similarities and differences between the Kiwi and Aussie liquor retail landscape. There were some similar trends in terms of premiumisation, health and well-being products, Rosé and craft beer, although there was less of a focus on price promotion due to Government restrictions on advertising. This led to greater competition at the retail store level in areas such as store layout, service, loyalty reward programs and ranging, which in turn created a better shopping experience for customers.
Independent liquor retail insights – New Zealand
Marketing Manager of Liquorland (no association with Liquorland Australia) Peter Dudfield said that of their “107 liquor stores across the country all were franchises, and all franchisees needed to renew their contract every few years. This allows for greater compliance with the group’s promotional program”. Liquorland has about 20 per cent market share of the retail liquor market in New Zealand, said Dudfield and the majority of stores were family-run businesses. Each owner is allowed a maximum of four stores, which is a way to maximise the time and effort each owner puts into each store.
While Dudfield explained that Liquorland faced similar challenges to Australian retailers with an overall reduction in the consumption of alcohol across the market, there were some green shoots in the premiumisation of spirits and craft beer. “We are in a good space when it comes to craft beer with some stores selling as much as 40 to 45 per cent of all beer sold as craft,” he said.
The recent Government ban on advertising discounts greater than 25 per cent (excludes in-store promotions) has seen greater competition in areas outside price promotion.
Blue Mountains retailer and store owner of The Bottle-O Hazelbrook and Cellarbrations Lawson, Dan Mackie, attended the Study Tour and said it was great to see how the Kiwi liquor retailers were operating with such strict advertising restrictions.
“Due to advertising restrictions it was exciting to see the way Kiwi liquor retailers were focusing on value rather than product and price.”
Mackie said that retailers were focusing on “store standards, ambience, theatre, range with a minimalistic approach and the amount of genuine craft beer was simply amazing”.
Competition in areas outside of price was re-enforced by Marketing Manager Bryan Cherry of Super Liquor. With a 145 liquor stores, Super Liquor is the second largest liquor retailer in New Zealand. Some similar themes as Liquorland, all stores are franchises, they re-sign contracts every five years and promotional compliance is around 95 per cent. There were also financial incentives from regular store audits to encourage promotional compliance and store standards. Cherry said their stores were going through a “brand refresh combined with a new approach away from product and price to a more occasion-based promotional program”.
For a full report on the ALSA Retail Study Tour of New Zealand, see the November issue of National Liquor News.