Alcohol on Forecourts is now an excepted and important category for the modern Forecourt Retailer.

I can truly only think of one thing that the supermarkets have inadvertently done that actually helps the independent forecourt - and that is in alcohol sales.

For years, local authorities turned down applications on the grounds that the buyers would in truth be motorists, though no one had proved it would be consumed behind the wheel. The supermarkets, having moved to out of town locations and all selling alcohol, set a precedent that travelling to find booze was now okay - hence the freeing up of the licensing laws to allow many forecourts to cash in on this lucrative market, which many now have.

Catalist tells us of the 8,953 open sites in the UK 7,829 have what they term a “Proper shop” (a standard shop or C-Store) of these 7,829 forecourt shops 2,661 now hold license to sell alcohol. So what of the remaining sites?  How difficult would it be to gain a licence? What should they stock and what profits can they expect? We asked some industry experts with maybe some surprising results.

 

What to stock?

Like any product category this is about getting the balance right for your customers.

  • Think about the local market
    • Is there local competition, what do they stock and is it well presented?
    • Is your competition an independent c-store, symbol, supermarket or stand alone off licence?
    • Market research never hurts; compare products, prices and promotions
    • If there is a strong alcohol retail presence elsewhere then why would customers change shopping habits?
  • How much space do you have for BWS (beers, wines and spirits). Typically sales will come in the following order:
    • Beer/ cider
    • White wine (including rose and sparkling)
    • Red wine
    • RTD (ready to drink- alcopops)
    • Spirits
    • Ensure space is allocated accordingly; i.e. don’t have more space devoted to red wine than white
  • A recognisable selection of products is important to send the right message to consumers.
  • Brand leaders
  • Research top twenty best sellers for wine and beer - use trade publications and web sites such as ‘off licence news’ as a source for information, as well as suppliers
  • Don’t be tempted to buy cheap wine and beer just to offer a deal. Poor quality products will not have customers coming back for more no matter how cheap it was
  • Customers associate quality with key mainstream brands:
    • Jacobs Creek, Blossom Hill, Gallo,
    • Stella, Fosters, Carling, Strongbow, Bulmer’s
  • Better to offer a great price on everyday favourites; Stella, blossom hill etc
  • Chilled is very important:
    • Chilled white wine, beer and cider is more attractive to the impulse purchaser
    • Don’t mix the product categories if you can help it
    • Have a good quantity of best sellers chilled at the expense of slower sellers
    • Ensure promoted products are chilled appropriately and easily accessible for the customer
  • ‘Clarity of offer’:
    • Does it make sense for the customer?
    • Be the customer for 5 minutes; be impartial and walk through your store to the alcohol
    • Does what you have on offer make sense
    • Take display tips from off licences - you don’t have to block wines by country of origin, space is likely to be limited, but you should be consistent in the display - don’t keep moving things
    • ‘Eye line is buy line’ - a good old adage, but make sure your eye line products are recognisable to the customer - best sellers/ brand leaders
    • Don’t single face wine - minimum 2 facings of each product will help create authority about your display
    • Pricing - make sure it is accurate and simple to understand
    • Promotional point of sale - don’t cover the product or hide the product making it impossible for the customer to take a bottle
  • Think ‘seasonality’
    • Perhaps you can sell ice to go with Bulmer’s/ Magners or spirits year round
    • Cool refreshing long drinks in the summer; rose wine and cider
    • Warming hearty drinks in the winter; red wine and real ale
    • Alter ranges accordingly but at the expense of best sellers

 

What are the potential profits?

  • There is not a lot of profit in alcohol; and it should never be considered a quick win category - many customers may take time to discover the existence of alcohol at your store - they are used to buying it elsewhere
  • Profit margins on standard RSP range dramatically
    • Spirits 5-20%
    • Beer 15-40%
    • Wine 25-45%
  • Profit margins on promotion can be affected
    • Spirits 5-15%
    • Beer 10-25%
    • Wine 15-35
  • Alcohol is an expensive category to stock
    • 3-5m of shelving/ chilled space to cover all categories could cost between £1,200 and £2,500 to stock at cost dependant on products chosen
  • Alcohol can provide an additional revenue stream, especially when combined with certain products
    • DVD/ movie rental
    • Snack ranges
    • Flowers/ gifting

 

 

What are the pitfalls?

  • Security is an obvious risk
    • Theft both internal and external
    • Ensure alcohol is located in the most visible area of the store
    • Spirits should always be behind the counter
  • Licensing laws must be observed
    • Underage drinking must be prevented by responsible retailing
    • It is also the retailers responsibility to ensure that a blatantly intoxicated person is not served more
  • It is expensive to obtain a license to sell alcohol - you must be confident that alcohol sales can recoup this outlay

 

 

 

 

 

 

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