Bargain Booze: destination warehouse

24 October, 2014

The outside of Conviviality Retail’s pilot BB’s Warehouse in Wakefield is adorned with the legend “the best brands at the best prices”. It’s a motto that’s been the guiding principle of the company’s flagship Bargain Booze brand since its first store opened in 1981, but here it’s being pursued in a whole new way for the chain.

BB’s Warehouse has been set up in what was the largest of the sites bought from Rhythm & Booze in May and the aim is to persuade shoppers to take a trip to a destination drinks shop, instead of the supermarket, for their weekly or party bulk buys.

It’s essentially taking the scale of Majestic but filling it with recognisable brands at keen everyday low prices, rather than top-end agency lines and special parcels.

There’s a premium wine section heading upwards of a tenner, but the sweet spot is anywhere between £5 and £9.

Unlike Majestic, there’s no minimum purchase. You can buy a single bottle of Blossom Hill if you like, but there’s a price incentive for buying three or six bottles.

Wines are displayed by colour first, then price – all wines at the same price point can be mixed and matched in an EDLP multibuy with incremental discounts for three or six.

All prices – except within the premium wine section – are rounded up to whole pounds to make the multibuy offers as transparent as possible.

“It’s about understanding today’s shopper, and more of them are shopping by price,” says Kenton Burchell, commercial director at Conviviality.

BB’s six-bottle prices will sometimes be matched by the supermarkets but usually only on short-term “stunt deals”, insists Burchell. “The important thing about this is that it is everyday,” he says.

For spirits, the price advantage comes with two or three-bottle purchases. A range of spirits from across different sub-categories are displayed at tiers of £13.50, £15,50 or £17.50, with £1 off any two bottles from each price point, or £2 off three.

There’s similar tiering on canned beer with full-case deals showing the per can price.

“Because a lot of manufacturers have gone into 10s or 12s or 15s, a lot of people don’t really know whether they’re getting a good deal or not,” says Burchell, “so we’ve gone back to try to make it really easy for the shopper and said ‘this is the price of a can’. It’s about the way people shop. They do think about the price of a drink.”

In bottled beer, there is a three-for-£5 and six-for-£9 permanent mix-and-match across the entire range, including both craft and continental brands.

Ale has a substantial local selection, which will be tailored to a 15-mile radius of any future openings.

The graphics are bold throughout, in Bargain Booze’s trademark black, white and red (though a warmer shade), helping to fill the space and soften the look of what is, effectively, a 3,000sq ft shed. It feels like a shop, not a cash and carry. “It’s not Costco, but it’s also not Majestic. We didn’t want to create another Majestic,” says Burchell.

The retail space has been made bigger by taking out a false ceiling and some storage from the old Rhythm & Booze.

“We’ve completely taken it back to a shell and refitted it to look like a warehouse. It’s airy and spacious but the most important thing is that the customer can see right to the back of the store and the whole offer when they walk through the door.”

The format is aimed at shoppers who like wine but who are price conscious and want the reassurance of brand names, whether mainstream or premium.

“You don’t have to really know about wine – we want to make this accessible to everybody,” says Burchell.

“Our customer is the supermarket customer as well as those who want to find something a bit different. We have some wines which are exclusive to us and part of the plan is to develop more of them over the months to come.

“The ideal customer is somebody who is looking for a bargain. Just because you like good wine it doesn’t mean you don’t like a bargain.”

The store is under company management, rather than franchised, and a second should be open by Christmas.

“We are looking for the next location to be in a more affluent area,” says Burchell. “We want to test that because it’s all about learning.”

Might existing franchisees be worried that BB’s Warehouse will come into competition with them?

“You will find some of [these prices] in Bargain Booze but not all of them,” Burchell concedes. “But we’re not putting any of these anywhere near a Bargain Booze. We’ve got a minimum of a five-mile radius in which we would not operate one of these stores. We are going to have more but we don’t see ourselves having hundreds.”

He adds: “It also provides our franchisees with another option and we do already have some interested.”

Could finding and paying rent on a suitable site and refit costs prove prohibitive?

“It doesn’t cost as much as you might imagine,” argues Burchell. “The fit out is quite industrial – it has got a cost to it but it’s comparable to a full refit in a [similar-sized] Bargain Booze Select Convenience. Also, a convenience store fit out involves a lot of refrigeration.”

The proof for potential franchisees might come in the figures.

The company says that the number of transaction are up 19.7% on its previous Rhythm & Booze incarnation with turnover ahead by 40%. The average transaction value is up 20%, being driven by wine and multibuys. The wider range of multibuy options – which in wine were mainly two- for offers in R&B – have seen multibuy transactions increase by 28%. Multibuys on premium bottled ales are 8% ahead.

“Multibuys are working very well,” says Burchell. “We’re very excited that this is connecting with shoppers.”

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