Kemenys' thumbs up for online offer

IN ITS latest move to survive against supermarket and liquor chains, the family-owned wine retailer Kemenys was due to flick the switch last night on a new era of online sales.

By InvestSMART · 3 Dec 2010

By InvestSMART ·
3 Dec 2010

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IN ITS latest move to survive against supermarket and liquor chains, the family-owned wine retailer Kemenys was due to flick the switch last night on a new era of online sales.

Kemenys, run by Emma Kemeny and her two sons, Andrew and Gabor, celebrates 50 years this year and unlike other smaller retailers, has escaped being swallowed by bigger players.

The business has survived with only one store, in Bondi, a warehouse in Waterloo and its mail-order catalogue that is finally joining the digital age.

In figures lodged with the Australian Securities and Investments Commission for June 2009, Kemenys showed sales of $46 million and an after-tax profit of almost $1 million. In comparison, the Woolworths group - including Dan Murphy's and BWS - reported liquor sales last year of $5.6 billion.

Kemenys' chief financial officer, David Reberger, said there are more than 100,000 customers on the Kemenys database, many drawn through newspaper advertisements, and the bulk of sales come from catalogue phone orders. Kemenys expects to see about 10 per cent of its trade go online initially.

While Woolworths and Coles push more of their own wine brands, Kemenys pitches itself as going the other way: maintaining a strong offering of genuine labels. Its "cleanskins" also reflects this. Kemenys' Hidden Label is designed to move good-quality wine at excellent value, like a chardonnay for $35 that might usually sell for more than $100.

Its website will list all 2000 lines that it carries in store and an in-house panel that rates wines by quality and value will later be extended to include ratings by shoppers.

The chief executive of the Australian Liquor Stores Association, Terry Mott, said an increasing number of liquor licences have been given to online merchants - but many of them sell only online and compete solely through price. About 80 per cent of the market is still at a convenience store level - though some are now part of bigger chains, Mr Mott said.

Andrew Kemeny said the business was founded on competitive prices, good relationships and high-quality product. The catalogue includes a thumbs-up rating system many customers rely on. On the rare occasion a wine is awarded three Kemenys thumbs, it sells in a flash, he said.

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Frequently Asked Questions about this Article…

What is Kemenys' new online sales plan and how much of its trade does it expect to move online?

Kemenys is launching an online store to bring its mail-order catalogue into the digital age. The family retailer expects about 10% of its trade to go online initially as customers shift from catalogue phone orders to web purchases.

How large is Kemenys in sales and profit compared with major liquor retailers?

Figures lodged with ASIC for June 2009 show Kemenys had sales of $46 million and an after-tax profit of almost $1 million. By comparison, the Woolworths group (including Dan Murphy's and BWS) reported liquor sales of about $5.6 billion last year, illustrating the large scale gap between Kemenys and supermarket liquor chains.

How many customers does Kemenys have and how do they find the retailer?

Kemenys' CFO David Reberger said the business has more than 100,000 customers on its database. Many were drawn in by newspaper advertisements, and the bulk of current sales still come from the catalogue via phone orders.

What is Kemenys' wine strategy compared with Woolworths and Coles?

While Woolworths and Coles push more of their own wine brands, Kemenys positions itself on offering genuine, recognised labels and strong quality choices. It also sells "cleanskins" under its Hidden Label to move good-quality wine at substantial value.

What will Kemenys' website offer for wine shoppers?

Kemenys' website will list all 2,000 lines carried in store and will feature an in-house panel that rates wines by quality and value. The site plans to later extend ratings to include shopper reviews and ratings.

Are online-only liquor merchants becoming more common and how do they compete?

According to Terry Mott, chief executive of the Australian Liquor Stores Association, an increasing number of liquor licences have been issued to online merchants. Many of those businesses sell only online and compete primarily on price, even as about 80% of the market remains at a convenience-store level.

What is the Kemenys catalogue thumbs-up rating and does it influence sales?

Kemenys includes a thumbs-up rating system in its catalogue that many customers rely on. Andrew Kemeny says wines awarded the rare three Kemenys thumbs often sell out very quickly.

Who runs Kemenys and what is the company's background?

Kemenys is a family-owned wine retailer run by Emma Kemeny and her sons Andrew and Gabor. Celebrating 50 years, the business operates one store in Bondi, a warehouse in Waterloo and a long-running mail-order catalogue, and says it was founded on competitive prices, strong relationships and high-quality product.