FQR deal didn’t stack up

29 October, 2010

First Quench’s demise was?a terrible blow for many people. Thousands were made redundant, and during the early months, like many in the?industry, I noticed an increase in people approaching me wondering if we?needed any staff. Would that I was able to help them all – it’s hard not to?be sympathetic to their plight.

While I wouldn’t claim that every one of First Quench’s retail employees was a shining star, I was approached by a few who, had I the need, I would have happily employed.

I believe First Quench’s rise and demise is symptomatic of the consolidation trend ruling the drinks industry at present. Every time a business is sold, its character changes a little, sometimes for the better, but often not.

It’s unusual that a small business swallowed up by a larger one manages to retain its spirit. Oddbins’ devolution from Castel ownership is a graphic illustration of a company that might just manage the transition from small to big and back again – let’s hope there’s a happy ending there. At least Oddbins has remained within the drinks industry – I think it’s likely First Quench’s undoing was to become a commodity traded by?private equity firms.

First Quench did two things that profoundly changed the face of high street alcohol retailing. The first was the three-for-two pricing mechanic, the second the famous “secret” 40% discount voucher.

The adoption of a supermarket-style three-for-two promotion divided its customer base. Half saw it for what it was – a way of overpricing single bottles – and the other half accepted it as the way of getting the best deal on wine. Crucially, it made “normal” prices seem expensive. Ditto the 40% discount voucher. Many customers gleefully took the opportunity to stock up with cheap drinks, and to be fair, who wouldn’t? I seriously thought about it as a way of getting stock at a good price, while dealing a swift kick to the opposition.

The knock-on effect was to make consumers believe they were being ripped off by paying full price for anything. The notion of a 40% discount on anything sends one message – most of the time, we’re creaming it. Even now, consumers are waiting for their next 40% discount.

Both of these promotions sent a message to consumers – the same one supermarkets continue to spread today – buy on price, and price alone. Acceptance of the BOGOF, three-for-two and 40% discount means consumers now feel anything offered at full price must be overpriced. The one question I get asked more often than I care to remember is: “Have you got any deals on?”.

Yes, the deal is that we are an independent business promoting interesting and good-quality beers, wines and spirits. The deal is that by buying here, you resist the dreary homogenisation of our high streets. The deal is that by supporting us, you help people remember the difference between a trade and an occupation.

That’s been the deal all along, and one year after First Quench’s demise, that’s still the deal we have today.

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