Coles launches new liquor format

Date : 19 October 2016

Coles Liquor Group has opened a new format store under the name of Liquor Market in Melbourne.

New big box format focused on simplified range and value

The new 1,000 sq m store is located in Ringwood, a suburb to the east of Melbourne and is the latest development by Coles in its attempt to turnaround the performance of its liquor operation. The size of the store means that it is more likely to compete with Dan Murphy's, however will differentiate itself by selling a reduced and simplified range at low prices. The Liquor Market website says that the new brand has a focus on low costs and customer education through weekly masterclasses and tasting events, with the tagline 'low cost & so much more'.

Liquor turnaround gaining momentum

Coles has made a significant step in its liquor turnaround in FY16, with LFL sales returning to positive growth. However, the retailer still has significant work to do in order to gain market share and competitiveness. Momentum should accelerate in FY17 with 200 Liquorland renewals planned, supplemented by further value and range simplification. However, sorting out the performance of its big box First Choice liquor format remains a challenge, especially given the strength and popularity of Woolworths Dan Murphy's format.

Coles' plan for success is to do the simple things exceptionally well...

We will have to wait and see what Coles does with the trial of Liquor Market, however there are two obvious options if successful. Firstly, to roll out the new format as a standalone brand, alongside existing liquor formats Liquorland, First Choice and Vintage Cellars. However, with so many formats this provides both complexity and therefore cost to operations, plus a rather confusing customer proposition. Alternatively, the new format could be rolled out across the First Choice estate, with stores rebranded under the new banner. What is certain is that Coles either through its supermarkets or liquor formats is driving growth through simpler ranges, better value, enhanced in-store experiences and a strong shopper focus.