Chain reaction

04 February, 2011


e want to be as well-known as Threshers.”?It’s a bold statement for any off-licence chain to make, not least because these days Threshers is best known for going out of business, but for a chain that mainly consists of ex-First Quench outlets it is particularly intrepid.

But Chas Majeed, business development manager of Sussex-based M&O Trading, is confident that the company’s chain of off-licences and convenience stores can succeed where Threshers, Wine Rack and The Local failed.

“We only picked out the ones that were doing good money – the administrators published all their sales figures so we knew which ones to go for, whereas when Threshers was taking over Unwins it took all the shops on, so for example there would be two Threshers quite close to each other,” he says.

“Ultimately we want to be a recognised brand so everyone will know where to go, everybody will recognise the name. We want to be as well-known as Threshers was, but people won’t think of Threshers, they’ll think of Hartleys and The Offie.”?Family-owned M&O has four shop formats – Hartleys, which specialises in wine; The Offie, which has more of a beer focus, and Mulberrys and Easy Hours convenience stores. There are currently 16 Hartleys outlets, with another four due to open in the next four weeks.

The business has been trading for three years, running just 16 shops before First Quench collapsed. Today it has 40, with another 10 in the pipeline – and the directors’ aim is to get up to 70 shops by 2012.

M&O and its agent, Brighton-based Carr & Priddle, dealt directly with landlords of former First Quench shops to build up the estate, which stretches from Littlehampton in the west to Newhaven in the east, and Banstead and Tadworth in the north.

Majeed says: “We did make offers to KPMG but they wouldn’t sell to us in groups and they were very complicated people to deal with, so we gave up and went directly to the landlords.” The biggest challenge in such a massive expansion has been finding good staff. “In our wine shops we need people who know a little bit about wine. We were lucky that we took on some of the ex-Threshers staff,” says Majeed. More staff training is in the pipeline, as M&O is about to employ a wine educator to teach Hartleys and The Offie workers more about wine.

The company sources drinks from Shoreham-based Palace Drinks, Booker, Nisa and importers including Stratford’s Wine Agencies.

It manages to run some pretty eye-catching deals, including a two-for-Ł5 promotion on Italian wines. So does that actually make any money??“It’s working on low profit margins,” Majeed explains. “We have promotion lines in beers, wines or whatever and we are only making 5% on them. But it is about the footfall. That’s why we have our own selected products, on which we always try to beat everyone on price, including Foster’s cans and Blossom Hill.

“Not all our wines are cheap, it’s just some lines where we like to keep the promotions going all year round.” The chain leaves gaps on shelves so there is room for customer requests, and a programme of in-store tastings is due to start this year.

Majeed says Christmas trading was fairly good, considering the weather. “This Christmas we found our beer sales weren’t up but our wine sales really grew. We sold a lot more wine this year, even in the shops that we had before.”?It can be an uphill struggle for high street off-licences.

“What’s made it harder is not the economy, it’s the licensing law that changed so that everybody can apply for a licence,” Majeed says.

“Whereas there was a certain radius where you couldn’t apply for a licence, which was lucky for Unwins and Threshers because you couldn’t get a licence next door to them, now anyone can crop up anywhere – even a dentist can get a licence now.

“It’s not that people are drinking less. People are drinking more because the variety of wines has changed and people’s knowledge of wine has improved.

“The only problem is everybody has got a licence, and that is why I think the guys at Threshers suffered.”?But Majeed is confident about the future of the sector. “There always has been and always will be a place on the high street for off-licences. I don’t think their role has ever changed as I think the convenient hours, full ranges, locally produced products and the flexibility to offer discounts on bulk ordering makes an off-licence much more appealing,” he says.

“Shopping trends are switching back to the high street from the big stores; it means the customer will only buy what they need at the time rather than bulking out on items and deals that they didn’t really need in the first place, often resulting in wastage.

“I also believe that customers like to buy their alcohol from knowledgeable and responsible retailers who can respond to customer requests quickly, and as long as we are competitively priced, friendly and stocked with a full range we’ll keep our customers happy – and that’s what is important to us.”

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