OLN was given a sneak preview of Rhythm & Booze’s new image in an interview with Costcutter chief executive Nick Ivel and Sir Michael Bibby, chairman of Costcutter owner the Bibby Group.
A black fascia with a new Rhythm & Booze logo, in which a treble clef replaces the ampersand, and a sleeker look in-store are part of the mix. The range is to be revamped and all stores will carry at least a small con- venience offering, with some holding a much bigger range.
The concept is to be rolled out as a national franchise in the next six months.
Ivel said: “We believe there is a big market out there. There are other players – the big one is Bargain Booze – but we would like to roll ours out nationally, not specifically in regions.
“We have put a lot of cash into developing the fascia and the concept and have set ourselves some pretty hefty targets. We’ve seen a few players drop out, especially when First Quench went into administration, but we believe there is a gap in the market. It is fairly tired and we believe we can breathe a fresh new bit of life into that market.”
Ivel wants Rhythm & Booze franchisees to make margins greater than the “traditional” 13%-14%, and plans to use the chain’s supply network to offer alcohol deals to retailers across all Costcutter’s fascias that don’t decrease their margins.
He told OLN: “There are a lot of promo tions on booze but they do tend to deflate margin. We want to offer promotions that don’t deflate margin.
“With the franchise we will make sure they can make decent margins – not the tra ditional margins made by franchisees of 13%-14%. If the people are still only going to make those margins, you are not going to change the marketplace.”
The plans to rejig Costcutter’s alcohol sourcing come as the business prepares to announce a major change to the way its shops are supplied, when its deal with Nisa comes to an end in 2014. Ivel said the new supply system – to be announced in September, if not before – would be “industry-leading”, “an exciting change for our marketplace” and “one that puts Costcutter members first”.
He added: “It will lead to further consolidation in the marketplace.”
Both Ivel and Bibby were positive about the future for the high street off-licence sector.
Bibby Group has been rumoured to be looking at drinks retail for several years, and was thought to be in the frame as a potential buyer for the collapsed First Quench estate and to be looking at Bargain Booze when owner ECI Partners put the business on the market.
Bibby dismissed the speculation as “just rumours”, but said Rhythm & Booze went into administration at a time when Bibby was able to invest in Costcutter, after taking outright ownership of the business last October.
He said: “There is a growing trend in convenience of more people shopping locally and a larger spend going locally, to reduce wastage and lower petrol costs, and for the lifestyle people are facing. As long as we target the appropriate customer business, we are opening a local service and there has got to be an opportunity there.
“Most of the risk, we believe, is positive for the small off-licence.”