Off licences have been a hot topic lately with the widely publicised changes in licensing laws. But while forecourts are yet to see the full implications of the new regulations, it’s clear that alcohol is an increasingly important part of the shop offer.
Those retailers that managed to take advantage of their grandfather rights – or are proactive enough to ensure their application is filed and approved by the final deadline of November 24 – will continue to benefit from the huge demand for beers, wines and spirits in a convenience environment.
And it’s the ‘big night in’ occasion that’s proving ever-popular, with the forecourt shop being the ideal vehicle for this, according to a new report from Datamonitor. Pandita Louram, Datamonitor’s forecourts analyst, says: “Consumers are increasingly choosing a night at home with a nice meal and a good wine over the over-priced and low-quality wine often offered at restaurants. The sale of alcohol on the forecourt has the potential to dramatically increase the average basket spend.”
A survey of 960 shoppers – including 111 forecourt customers – part of HIM’s report ‘Optimising Drinks Sales in the Off-trade by Understanding Customer Opinions’, reveals that one third of UK adults drink 80% of their total alcohol consumption at home, and around one in five say the share of home consumption has increased in the past 12 months.
However, retailers could be losing out on important wine sales, claims the report. Looking at what’s important in the alcohol category, the survey reveals that wine gets the worst ratings for pricing, promotions and ranging of all the drinks categories. While the category is difficult to get right, says the report, shoppers need to be confident that their preferred products will be available, competitively-priced, with attractive promotions in-store.
The report adds that price, recognisable brands, and promotions are the most important factors for the wine shopper, with 80% of them prepared to spend more than £4 a bottle and 50% prepared to spend more than £5.
But some forecourt stores are certainly not missing a trick when it comes to wine sales. Oakdene Filling Station is a rural forecourt with a Londis store on the main road into Southport. Alcohol sales account for nearly half of the shop’s turnover, and owner Mark Gilson says customers come from a 30-mile radius, choosing from a range of some 500 different wines.
Mark says the presentation of floor stands gives customers all the information they need at a glance, and regular value offers are always in store to build shopper confidence. Mark also hosts in-store tastings and attends supplier tastings himself. “No wine reaches our shelves unless we are confident about it ourselves,” he says.
Beer sales on forecourts are buoyant and set to continue growing over the next couple of years, according to InBev UK, which is urging forecourt retailers to put the display focus on big brands with proven consumer appeal.
Bob Reason, national account controller at InBev, predicts that beer sales on forecourts will continue to achieve double-digit growth for the next couple of years. “However, they need to ensure they maximise sales potential through a focus on key retail issues which can have a significant impact on beer category profitability – notably ranging, merchandising, display and chilling,” he says.
“The beer category is increasingly driven by the success of big brands and you need to reflect that in terms of your range and the space allocated to these top performers,” adds Reason. “The top 25 SKUs account for around 75% of alcohol sales on forecourts, which highlights the fact that retailers need to focus on a small range of big brands.
“It is important that the fixture is laid out in a logical fashion to make it easy for shoppers. Research shows that finding a product is not available on the shelf is frustrating for shoppers.”
With today’s shoppers more time pressured than ever before, Reason says retailers must ensure they make the purchasing decision as easy as possible. InBev UK recommends that retailers follow the Federation of Wholesale Distributors’ (FWD) merchandising Blueprint by making sure brands are clearly located by vertical brand blocking with cans and bottles of the same brand alongside each other for maximum impact.
“Signposting the beer category with lead brands will help to guide your customers to the category,” says Reason, adding that it is also important to ensure that the top brands are available in the most popular pack sizes. Although the four-pack is still the mainstay of forecourt business, there is an opportunity for retailers to stock larger formats, such as eight or 12-packs, to cater for seasonal periods of strong demand.
One issue holding back the development of beer on the forecourt is visibility. Research shows that around three out of 10 forecourt shoppers still do not realise that alcohol is available, claims InBev.
“Operators can address this challenge through improved signage in and around the forecourt to communicate that alcohol is available,” says Reason. InBev UK has helped operators improve visibility with the development of Stella Artois point of sale designed specifically for the forecourt environment.
There is also an opportunity for operators to raise the profile of beer by displaying major brands in high-traffic locations such as the front of the store or near the till. “Around 34% of beer purchases are made on impulse – so make sure that beer is visible to customers who may not visit the drinks fixture,” says Reason.
“Offering chilled beer is absolutely imperative for convenience retailers because research shows these shoppers want beer that is ready to drink,” adds Reason. “It is key that where chilling capacity is limited, the range is focused on leading brands. Too many SKUs in the chiller only serves to affect availability and does not allow packaged brands to chill long enough prior to purchase.
“Providing chilled beer not only satisfies the needs of shoppers but also creates a strong unique selling point because retailers in other trade sectors don’t always provide it.”