Sales up after FQR collapse

29 October, 2010

Takings are up for nearly two-thirds of drinks suppliers in the year since First Quench collapsed, an OLN poll reveals.

Sixty-five per cent of suppliers polled – covering wine, beer and spirits, from the biggest companies to small independents – said takings have increased since this time last year when the chain folded.

Income remained stable for a third, while just 4% said their takings had dropped.

“Much of the First Quench business has shifted to other sources,” one respondent commented. Another said: “We have been more focused and have applied a new strategy to off-licences.”?Some of those polled had stopped trading with First Quench before it collapsed, while others only had to deal with a small debt as the retailer was only a minor part of their business. However, one anonymous supplier said the collapse was “disastrous, with brand owners not paying for marketing and breaching contracts”.

Forty per cent of suppliers said they were less confident about the future of specialist off-licence chains, with one commenting that multiple grocers are “taking over the world”.

But 37% said they were more confident about the sector, while 24% said they felt the same as last year.

“I think First Quench’s case is a good learning experience for the independent trade. It encourages them to find a point of difference from the supermarkets – not price, but service, selection, advice and so forth,” said one.

Another added: “There is huge potential – you just need the right people, need to keep things tight and understand how to run a business of that nature.”?Sixty-one per cent of those polled were supplying First Quench when the business collapsed, and 58% are now supplying some of the new chains that have sprung up since then – with a further 16% saying they are planning to supply them in future.

The biggest increase in business for suppliers has been from independents – 68% of those polled said they were doing more business there, compared with 58% trading more with supermarkets, 45% dealing more with other specialist chains, 32% working more with cash and carries, and 8% exporting more.

Some said they were doing more business with all customer areas, while others said they were doing less all round.

“Majestic and Bargain Booze appear to be prospering,” commented one supplier.

Half of those polled said First Quench’s demise had not changed the way they did business. Of the other half, 37% said they had become more cautious about dealing with specialist chains, although 11% said they were more willing to deal with them.

Eight per cent said they had shortened credit terms and 3% had been forced to lay off staff, while others said they had taken on more staff. They reported becoming more diligent in their terms of trade, monitored credit terms in general more carefully and built stronger strategies for other areas of the business.

First Quench Special from page 11

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