Diageo launches bid to grow alcohol category by £450 million in convenience stores

Nielsen research shows that 90% of UK households buy alcohol at least once a year, but only 30% buy it from a c-store.

If the sector could get alcohol into one extra basket in every 100 it would grow by £450 million, according to Smirnoff and Guinness supplier Diageo. 

That would equate to £9,000 per store annually and help c-stores out at a testing time. 

Claire Kendall, who works in Diageo’s category development team, said: “It’s a challenging environment for convenience. The channel is growing and there’s a trend towards more frequent, smaller shops. But, on the negative side, competition is intensifying. As multichannel shopping increases there are more and more options out there for consumers, and the living wage introduction is also squeezing retailers. 

“Alcohol is the number two category in convenience, after tobacco. It’s a really valuable basket. Ninety per cent of households buy alcohol but less than one in three buy it here. The opportunity is huge to get more people buying alcohol in convenience and get existing shoppers to buy more.”

There are three key barriers to people buying alcohol in c-stores, according to Diageo: they are shopping on autopilot and have not considered buying alcohol in a c-store; they can’t find what they want from a BWS range or it isn’t chilled; or they think they can find better value for money somewhere else. 

The supplier has created an initiative called Inspire-Display-Sell as part of its ongoing My Store Matters initiative, which is designed to help c-stores with ranging and merchandising of the entire alcohol category, not just Diageo products.

It has divided each of the three pillars into bronze, silver and gold. For Inspire, a bronze standard is stocking the core range as this can apparently increase BWS sales by 64%, while also championing smaller formats. Silver is promoting key calendar and sporting events on shelf. Gold is using cross-category promotions with meals and snacks and adding window or outdoor displays to entice shoppers.

There are also bronze, silver and gold standards for Display and Sell. Among the advice is: block spirits sub-categories, stock beers, ciders and RTDs in the chiller, place premium products and bestsellers at eye level, use shelf strips and colour coding to highlight sub-categories, use price-marked packs, display BWS away from the main shelf to drive impulse purchases and train staff to help them upsell. 

Spar retailer Julian Taylor-Green, who has a store in Hampshire, said: “It gives you the real rudimentary basics to get your offer and range correct. Alcohol is core to my business and it’s essential to get the range right. Shopping has changed over the past 10 years from the weekly shop at the multiples to people buying what they fancy on a daily basis, so there’s a massive opportunity for c-stores to make sure they have the right products highlighted in store.”

Londis retailer Alpesh Shingadia added: “It gives retailers great category advice, which is what retailers are after. The initiatives are easy to take on and don’t take much time and I think retailers will see the benefits.”

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