By Deb Jackson, editor National Liquor News
IGA Liquor has topped the latest Roy Morgan satisfaction ratings placing it ahead of its major competitors.
The research shows that customer satisfaction with IGA Liquor in the year to August 2017 was 93.4 per cent, which is a major turnaround for the group which was ranked ninth 12 months ago.
Over the last 12 months, IGA Liquor improved its customer satisfaction rating by 17.3 percentage points, well ahead of the improvement seen from its major competitors, with BWS the nearest (up 3.6 percentage points), followed by Woolworths/Safeway (up three percentage points) and Thirsty Camel (up 2.1 percentage points).
Only two of the top 10 stores showed declines in satisfaction over the last year, they were Cellarbrations (down 10.2 percentage points) and First Choice Liquor (down 3.4 percentage points).
These changes in satisfaction have bumped Dan Murphy’s to the second highest rating on 92.3 per cent, followed by Aldi Liquor at 91 per cent and First Choice Liquor at 90.1 per cent.
These are the latest findings from Roy Morgan’s Single Source Survey (Australia) of more than 50,000 consumers per annum, which includes interviews with more than 8000 customers of liquor stores and retailers.
Satisfaction with Liquor Stores and Retailers
Based on number nominating liquor store or retailer where usually buy alcohol Source: Roy Morgan Single Source (Australia). 12 months ended August 2016, n= 8,509; 12 months ended August 2017, n= 8,721. Base: Australians 18+ who have purchased liquor in last four weeks and nominating ‘usual store’.
‘Big Discretionary Spenders’ provide potential for increased liquor sales
Roy Morgan has developed a segmentation based on a person’s level of non-essential or discretionary expenditure, which includes purchases such as wine, travel and entertainment.
The top third of discretionary spenders are ‘Big Discretionary Spenders’ and so represent the largest potential for increased liquor sales.
The liquor stores and retailers with the highest proportion of these ‘Big Discretionary Spenders’ in their customer base are First Choice Liquor (44.1 per cent), Dan Murphy’s (43.1 per cent), IGA Liquor (41.8 per cent) and Liquorland (40.6 per cent). This group has the greatest potential to increase sales from their existing customer base.
The three major liquor outlets with the lowest proportions of ‘Big Discretionary Spenders’ are Thirsty Camel (26.1 per cent), Bottlemart (30.2 per cent) and Aldi Liquor (33.4 per cent). As a consequence of this type of customer profile, there is less potential for them to increase sales from their existing customers.
Customers of major liquor stores who are ‘Big Discretionary Spenders’
Based on where usually buy alcohol 2. Top third of the population based on level of discretionary spending Source: Roy Morgan Single Source (Australia). 12 months ended August 2017, n= 8,721. Base: Australians 18+ who have purchased liquor in last four weeks and nominating ‘usual store’.
Norman Morris, Industry Communications Director, Roy Morgan Research, says: “Liquor stores and retailers are facing tough competition, not only from their direct competitors but other retailers who are all competing with them for the discretionary dollar. It is important in this highly competitive market for liquor retailers to understand how they are performing in terms of customer satisfaction relative to their competitors and where are the best opportunities for increasing sales.
“Improving customer loyalty is an issue for most liquor retailers as it would provide a major opportunity for increasing sales. This is evident by the fact that generally, on at least a third of purchasing occasions over a four week period, customers purchase from a store that is not the one that they usually buy alcohol from. This indicates a considerable degree of shopping around with insufficient incentive to consolidate liquor purchases with any one store.
“The opportunity to increase sales from existing customers also depends on the customer profile of each retailer. This research has shown that there is considerable variation in the proportion of ‘Big Discretionary Spenders’ across the major liquor retailers and as a result the propensity to achieve increased sales from existing customers will vary.
“Roy Morgan conducts over 8000 in-depth interviews per annum with liquor purchasers, covering all major retailers and liquor types. This puts it in the unique position of being able to provide detailed insights into all aspects of this market for participants and those interested in this key retail segment.”