Australians spent a massive $14.5 billion on alcohol from liquor retailers across 2016 says the latest data released by Roy Morgan Research.

Almost three-quarters of this money went to supermarket-affiliated retailers with independent stores dragging far behind the major chains like Dan Murphy’s and BWS.

Woolworths dominates

Woolworths’ Dan Murphy’s continued its success in 2016, taking approximately 30 per cent of the total $14.5 billion spent at liquor stores.

Combined, Woolworths-owned alcohol stores took just under 50 per cent of the total money spent at liquor stores by Australians across the year.

Market share over time: supermarket liquor stores’ total alcohol retail share of dollars

Source: Roy Morgan Single Source (Australia), January 2012-December 2016. Base: Australians 18+ who purchased packaged alcohol last 7 days. * NB: Woolworths Group = Woolworths Liquor, BWS and Dan Murphy’s; Coles Group = Liquorland, First Choice and Vintage Cellars.

The best performing Wesfarmers (Coles’ parent company) store was First Choice Liquor which increased its market share from 4.5 per cent in 2015 to 5 per cent in 2016.

Aldi Liquor also did better in 2015, despite closing its online store, increasing its market share from 2.4 per cent to 3.5 per cent.

Alcohol retail dollars by store type

Source: Roy Morgan Single Source (Australia), January-December 2016, n=3,502. Base: Australians 18+ who purchased packaged alcohol last 7 days. * NB: Woolworths Group = Woolworths Liquor, BWS and Dan Murphy’s; Coles Group = Liquorland, First Choice and Vintage Cellars.

Combined, Wesfarmers owned stores took 15.5 per cent of Australia’s alcohol retail dollar whilst IGA took 3 per cent, hotel bottle shops 12.2 per cent, wine clubs 4.6 per cent and duty free sales 0.5 per cent.

Advice for small and independent alcohol retailers

Norman Morris, Industry Communications Director at Roy Morgan Research, said the data confirms supermarket-owned retailers continued to lead the liquor market.

“For independents, hotel bottle shops and less mainstream supermarket chains wishing to remain competitive, it is essential to understand what it is about Dan Murphy’s that attracts such a large (and growing) share of the market and to do what they can to emulate these qualities,” Morris said.

“For example, Roy Morgan data shows that people who usually shop at Dan Murphy’s place above-average importance on a good range and a well laid-out store where it’s easy to find what they’re looking for. At the same time, they enjoy having a good look around liquor stores, suggesting a willingness to browse rather than just zone in on what they came for and then get out fast,” he said.

“Additionally, the smaller retailers need to be aware what their existing customers value in a bottle shop—whether it’s being located close to other shopping spots (ALDI and IGA Liquor customers place great importance on this), low wine prices (noticeably more important for ALDI shoppers) or good specials (a particular priority for First Choice customers)—and ensure that they continue to meet these expectations.” Morris said.

“As with Bunnings in the hardware sector, Dan Murphy’s is such a category killer for the alcohol retail market, that it’s unlikely to face any challenges from its smaller rivals in the near future. But this doesn’t mean the smaller players can’t claim more of the booze market for themselves, by emphasising their unique strengths at the same time as they apply what they can from Dan Murphy’s success to their own business model,” Morris stated.

 

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