Coles trials warehouse liquor store format
The supermarket chain, owned by Perth-based conglomerate Wesfarmers, has opened a "Liquorland Warehouse" in Sydney that is two to three times larger than the usual Liquorland format and offers a wider variety of wines, beers and other alcoholic beverages.
Situated in San Souci, south of Sydney, the Liquorland Warehouse will use its larger buying power to offer lower prices to customers.
"Liquorland Warehouse in San Souci has been developed as a trial store that will provide us with an active retail space to test new innovation in liquor retailing," A Coles spokesman told BusinessDay. "The opening of this store saw hundreds of customers experience the new format and we will continue to test and listen to customers to ensure we continue to evolve this site in line with what our customers want."
The spokesman said the Liquorland Warehouse concept sat somewhere between a normal Liquorland and a larger 1st Choice store. It had more refrigeration and a bigger range than a traditional Liquorland.
The warehouse format trial, which began last week, is part of a wider strategy by Coles to improve its liquor operation, which has remained stubbornly behind the pace of rival Woolworths and its Dan Murphy's stores for at least five years.
It is a problem that Wesfarmers boss Richard Goyder has highlighted in a number of sales and profit updates over the past year for acting as a drag on the turnaround of the Coles supermarket group and its sales momentum.
Frequently Asked Questions about this Article…
The Liquorland Warehouse is a warehouse-style trial store Coles opened to test a new format for its liquor business. It's important for investors because it's part of Coles' wider strategy to improve an underperforming liquor unit that has been lagging behind rivals, and the outcome could affect Coles' sales momentum and Wesfarmers' updates to investors.
The trial Liquorland Warehouse is located in San Souci, south of Sydney. According to the article, the warehouse-format trial began last week and Coles described the opening as drawing hundreds of customers.
Coles says the Liquorland Warehouse sits between a normal Liquorland and a larger 1st Choice store. It is two to three times larger than the usual Liquorland format, offers more refrigeration and a bigger range of wines, beers and other alcoholic beverages.
Yes. Coles intends to use the warehouse format's larger buying power to secure better deals and offer lower prices to customers, helping it compete with big-box market leaders like Dan Murphy's.
Yes. The warehouse-format trial is explicitly part of Coles' strategy to better compete with big-box rival Dan Murphy's (Woolworths), addressing a liquor operation that has been behind the pace of its competitor for at least five years.
Coles reported that the opening of the Liquorland Warehouse saw hundreds of customers experience the new format. The company said it will continue to test and listen to customers to evolve the site based on feedback.
Coles is owned by Perth-based conglomerate Wesfarmers. Wesfarmers' boss Richard Goyder has highlighted the liquor operation as a drag on the turnaround of the Coles supermarket group and on sales momentum in recent sales and profit updates.
Everyday investors should watch for further trial results, any expansion of the Liquorland Warehouse format, changes in liquor sales or margins, and future sales and profit updates from Wesfarmers that comment on progress in the liquor business.
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