Take-away liquor in Australia is increasingly dominated by the big-box discounters at the expense of hotels, which now represent only one in eight sales.
The latest purchasing data from Roy Morgan puts the value of the Australian off-premise alcohol market at $14.5bn, with nearly three quarters of that going to supermarket-connected chains.
The indomitable Dan Murphy’s discounter has continued its relentless rise to stardom, now holding a whopping 29.9 per cent of total off-premise sales and the lion’s share of Woolworths’ unsurpassable 49.2 per cent market share, including its other banner groups, such as BWS.
The combined sales at independently run hotel bottle shops was just 12.2 per cent – stable against last year, and now more than the combined sales of independent liquor retailers, down 2.3 to 10.4 per cent.
Coles Group’s 15.5 per cent is down just 0.4 since last year, but 1.9 per cent since 2012, although its best performing banner, First Choice, rose 0.5 to five per cent of the market. Aldi liquor also rose, up 1.1 to 3.5 per cent.
The 4.6 per cent rise in share for Dan’s was partly at the expense of Woolworths’ other brands, with BWS and Woolworths Liquor both decreasing.
Roy Morgan Research Industry Communications director, Norman Morris, says there are clear lessons in the results for liquor retailers, particularly as Dan Murphy’s is unlikely to face significant challenges by its smaller rivals anytime soon.
“For independents, hotel bottle shops and less mainstream supermarket chains wishing to remain competitive, it is essential to understand what it is about Dan Murphy’s that attracts such a large (and growing) share of the market and to do what they can to emulate these qualities.
“For example, Roy Morgan data shows that people who usually shop at Dan Murphy’s place above-average importance on a good range and a well laid-out store where it’s easy to find what they’re looking for. At the same time, they enjoy having a good look around liquor stores, suggesting a willingness to browse rather than just zone in on what they came for and then get out fast.
“Additionally, the smaller retailers need to be aware what their existing customers value in a bottle shop—whether it’s being located close to other shopping spots (ALDI and IGA Liquor customers place great importance on this), low wine prices (noticeably more important for ALDI shoppers) or good specials (a particular priority for First Choice customers)—and ensure that they continue to meet these expectations.”
Morris cites that businesses armed with strong consumer data are better prepared to shape marketing strategies to appeal to the widest possible range of shoppers, and constantly changing market dynamics.
Woolworths’ pub division, ALH, operates over 300 hotels, which allows the supermarket giant’s banner brands to operate the off-premise liquor sales. Around 124 of the pubs are in Queensland, enjoying the known benefit of up to three satellite bottle shops per hotel licence.
There are now around 212 Dan Murphy’s Australia-wide, utilising Woolworths’ massive buying power and loss-leading “best price guarantee” to aggressively undercut in a marketplace based on price first.
As with its fuel division, the synergies with the supermarkets including driving customer shopping patterns is such that RRP can be discounted far more than can be sustainably offered by companies and distributors without the complementary channels.