Murphy's man to revamp Coles liquor

THE defection of one of Woolworths' most senior liquor executives to its rival, Coles, is tipped to trigger a price war as he brings tried-and-tested discount drinks strategies to the ailing retailer. Tony Leon,

By InvestSMART · 12 Sep 2008

By InvestSMART ·
12 Sep 2008

At Coles, now owned by Wesfarmers, he will oversee more than 10 times as many stores than at Woolies.

Industry watchers were surprised by the announcement yesterday that Tony Leon, the former general manager of Woolworths' liquor chain Dan Murphy's, would become Coles's liquor boss.

Mr Leon only announced his departure from Woolworths three months ago and he had not hinted at a move to its rival. It is thought he accepted the offer because he is ambitious and "loves a challenge", not because he was unhappy at Woolworths.

The job of revamping the Coles liquor business, which includes the Liquorland, 1st Choice and Vintage Cellars outlets, is a daunting task.

It is believed that Mr Leon, 50, aims to replicate the strategies he used to build the Dan Murphy's chain of low-priced, buy-by-the-case stores with his business partner, the late Dan Murphy.

One industry figure, who asked not to be named, said Coles was planning to take Woolworths on by opening more large-format liquor stores under its 1st Choice brand.

"There is going to be a huge price war, no doubt," he said.

When Messrs Murphy and Leon sold their five stores to Woolworths a decade ago, Dan Murphy's annual turnover was $100 million.

Mr Leon stayed with Woolworths, building the brand to 89 stores across the country, with plans for 155 within the next three years. His new job at Coles will expand his responsibility to 767 stores.

Dan Murphy's is regarded as the outstanding performer in Woolworths' stable of liquor outlets, which also include BWS and Woolworths Liquor.

A spokeswoman for Woolworths said Mr Leon's departure in June was "completely amicable, and to all intents and purposes it was to retire".

Mr Leon had worked at Dan Murphy's for 23 years. At Coles he will work under the chief executive, Ian McLeod, who is regarded as a turnaround specialist.

Mr Leon is believed to have been offered a hefty pay rise to jump ship, given that Mr McLeod will be paid a $2 million annual base salary as the chief architect of reshaping the Coles operation.