Discounters tipped for drinks retailing stardom
Two fast-growing discounter chains have been tipped as major players in the future of drinks retailing.
Home Bargains has more than 320 shops around the country – many of them in out-of-town retail parks – and plans to grow to 700 in the next five years.
It sells multipacks of big-brand beers, ciders and RTDs and wine in cases of six or 12 bottles, both in its shops and online.
B&M Stores opened 50 outlets last year and recently appointed former Tesco chief executive Sir Terry Leahy as its chairman.
Ten years ago the company had just 21 stores – today it has 379, and plans to keep on growing both here and in Europe. It is also aiming to float on the London Stock Exchange.
PLB bulk buyer Gary O’Kelly has tipped the chains to play a greater part in wine retailing going forward.
He said: “The businesses are turning over almost £1 billion a year each and are starting to open down south [from a heartland in the Midlands and the north].
“I used to sell them both decent quantities of well- known branded Australian and Californian wines.
“They both currently operate mainly on overstocks or clearance of branded products.
“But my feeling is that this is changing as they expand rapidly and soon will need a more regular and perhaps private- label solution, especially in the BWS category.
“Historically, neither chain spent a single penny on marketing and the branded retailers appreciated this as it helped protect the brand equity of some of the UK’s best-known wine brands.
“As they both grow and the need to fill their shelves increases, companies such as PLB will be well placed to offer them the total drinks solution.
“They are dabbling a bit with private label but there are still enough deals out there on existing branded wines to suffice – but who knows for how long?”
Discounters, led by German chains Aldi and Lidl, have been becoming more popular with UK shoppers for some years, putting supermarket prices under pressure and gaining plaudits for their wines in the press.
Steve Barton, chief executive of Innovation Drinks, said discounters were resonating with shoppers on more than just price.
“Some of the supermarkets have disenfranchised consumers with the complexity of their ranges and failed to deliver on things such as availability,” he said.
“BWS is one of the most complicated retail zones in FMCG. The model of the discounters is to have a tighter range and fewer suppliers and that makes shopping easier for customers.”