Coles trials warehouse liquor store format

Coles is trialling a range of new formats for its underperforming liquor businesses unit, comprising the 1st Choice, Liquorland and Vintage Cellars groups, including a warehouse-style model to better compete against big-box market leader Dan Murphy's.

Coles is trialling a range of new formats for its underperforming liquor businesses unit, comprising the 1st Choice, Liquorland and Vintage Cellars groups, including a warehouse-style model to better compete against big-box market leader Dan Murphy's.

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.