Winning 'marriage of convenience'
Expanding into the convenience sector is a key focus for Bargain Booze this year. In September 2006 the chain joined forces with Select & Save, which operates 120 stores in the Nisa-Today's distribution system, to trial a combined convenience and off-licence format. Joint managing director Matthew Hughes said the tie-up was "a marriage of convenience".
"Convenience retailing is very different to specialist off-licence retailing. Our proposition is about driving volume, driving footfall," he sa ys. "Whether it works with Select & Save or not, it will certainly work in some shape or form. Watch this space - there will be Bargain Booze convenience in some format."
The group had already
teamed up with newsagent Finlays, as well as a number of forecourt retailers and
video rental chains. Hughes
says: "Although some column inches
appeared in 2006 about Bargain Booze working with other retailers,
this is something we have always done. Although control and retail discipline are at the heart of the company's success, the retail format itself is flexible enough to complement many other types of business and, for this reason, tie-ups like this often work very well."
He insist s the move into different formats d oes not signal a lack of faith in the specialist off-licence business.
Bargain Booze made a major foray into the south last year - some 40 of the 58 stores it opened in 2006 were south of Birmingham, where the Crewe-based company now has around 10 per cent of its 600-strong estate. The first south coast Bargain Booze
opened in Hove in April, and the chain has
followed up in Brighton, Eastbourne and Saltdean as part of a team-up with Sussex-based video rental chain Videobox.
No longer the only off-licence chain to advertise on TV since Thresher joined the fray, Bargain Booze ran two national TV ad campaigns during 2006, as well as advertising at football matches and in national papers, including the Sun. It also ran a number of local ad campaigns
and plans to increase its focus on targeted local advertising this year.
In January 2006 ECI partners bought Bargain Booze from Electra Partners for £63.5 million, after the group had been on the market for 10 months. Hughes sa ys the new owner is a comfortable fit for the business, and expects to be with ECI for at least two more years.
"It is going extremely well - they are totally what we expected them to be, which is basically letting us get on with it on a day-to-day basis," he sa ys.
Hughes sa ys the group is constantly reviewing its
ranges - key changes last year were to boost
premium cider offerings with Magners, Bulmers and Gaymers , as well as increasing its premium offering in ales, spirits and wines, where it also added some "Old World classics" to the list.
More than 50 per cent of the wine range has some kind of promotional mechanic, usually price, constantly attached to it , and shops have POS for
quality wine s, including tasting notes and food matching advice. Bargain Booze has worked with Constellation Europe to hold wine education seminars for franchisees and their staff, covering wine production through to food matching. It also provides stores with a training package of a book and DVD to train staff on an ongoing basis.
As the group moves beyond its northern heartland, it is looking at different regional requirements and making sure stores in all its different areas have the brands they need, and use
a number of satellite distribution sites.
Weston Road Crewe, CW1 6BP
Parent company: ECI Partners
Current size of estate: 600 shops
Key personnel: joint managing directors, Matthew Hughes and Tim Stanley; finance director, Peter Hodgson; head of logistics, Peter Dockerty
Year founded: 1981 (first franchised as Bargain Booze in 1988)
Number of employees: 250 in head office, plus retail staff across estate
Shop formats: Bargain Booze, Bargain Booze Plus (540 stores), Thorougoods (60 stores)
Turnover: £446 million (16 months to April 30, 2006)
Pre-tax profits: £11.3 million (16 months to April 30, 2006)
Developments in 2006
Sold to ECI Group for £63.5 million
A concerted move into the south with around 40 new store openings
First steps into the convenience market with Select & Save trial
National TV, outdoor and press ads, local press and leaflet ads.
Challenges for 2007
Find the right way to move further into the convenience sector
Expand the business with at least 60 new franchises
More targeted local advertising.