By James Atkinson

Coles Liquor will cut the number of SKUs it ranges and set up a dedicated new exclusive brands group under a new strategy announced to key suppliers in recent weeks.

Coles' new general manager of liquor, Andrew Charlton addressed key suppliers on July 23 to outline the approach.

Similar to a range review conducted by Wesfarmers stablemate Bunnings in recent years, the SKU rationalisation has been interpreted as a move by Coles Liquor to generate some operational savings and improve its buying terms on the SKUs that are retained.

The suppliers that remain will get a volume uplift but on slightly tougher trading terms than they had previously.

Charlton further announced that Coles had set up a new internal group, Exclusive Liquor Brands (ELB), to expand its private label and control brand offering.

Headed up by Coles Liquor general manager of business development, Grant Ramage, ELB will work with suppliers on exclusive arrangements and proprietary brand extensions.

ELB will act as an overlay that supports the various category groups of wine, beer and spirits. 

"The category managers will remain in charge of the inventory and the ELB group sits over the top and gives them advice on category management and exclusive brands," an industry source told TheShout.

It was also revealed that the new Liquorland Warehouse store format is set for a wider rollout. 

Daniel Broeren, retail, food and beverage analyst at CIMB Investment Bank, told TheShout it remains to be seen what the impact of the SKU reduction will be on the First Choice business.

"The problem I find is that if they cull the range in Liquorland, then their buying power at First Choice starts to deteriorate for those SKUs, but you would assume they've done the sums on that," he said.

Broeren said ELB will play the same role as Pinnacle Liquor Group within the Woolworths business.

"Coles' private label strategy is far less sophisticated than that of Woolworths – it's obviously something that they felt like they needed to invest in," he said.

Wesfarmers will announce its full-year results next Thursday August 15.

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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1 Comment

  1. Well, who’d have thought. A divide and conquer strategy where those suppliers who have in the past ramped up production to meet Coles requirements hope that they are among the chosen few and will roll over and do back flips to to stay on the shelf. It’s called “screwing the industry”, and no matter what weasel words the Coles team use, it is all about limiting the offer and control at every point. Those suppliers who refused to get in bed with the Medusa in the past, may now sit back and smile. By the way, this represents a great opportunity for independents to support those who have not sold their souls.

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