Wine Rack plans to expand empire
Wine Rack plans to open four or five new stores by Christmas after announcing the business grew 6% over the past year.
The company has posted a profit of £380,000 for the year and chairman Laki Christoforou said he plans to grow the business “steadily”.
He said: “Given the economic climate we would have been happy to stand still, so a 6% growth – although it isn’t huge – is good news.
“The business is profitable but expanding at a steady rate.
“We are more than happy to grow at a faster rate but we need to find the right locations.
“Expansion all depends on finding the right stores.”
Despite the economic misery that has strangled the UK economy, Christoforou is convinced off licences have a future on the High Street.
He said: “People still want to go to a wine store and talk to somebody who knows what they are talking about, rather than pushing a trolley down a supermarket aisle.
“Our biggest challenge is to get customers to use their local wine store and look at the product range.
“We invest a lot of money in educating our staff, we do tastings every week in all our stores – we just need to get customers to come in and see what’s available.
“Every eight weeks we send out 25,000 brochures to the areas we deliver to. In the run-up to Christmas we will do some national advertising.”
He also believes the likes of Wine Rack can see off the threat of the big supermarkets.
“We find our customers don’t buy entry level wine from supermarkets,” he said. “We share 80% of our customers with Majestic and Waitrose.
“Our average spend per bottle is £8 while I think in supermarkers it is still under £5. We can compete because we are targeting different customers.”
He added: “Our customers are feeling the pinch like everybody else. But whereas customers may have bought six bottles at £8 each per week, they are now buying four bottles at £8 each.
“It’s hard, if you are used to Chablis, to start drinking Pinot Grigio. It is sad that they are buying less bottles but it’s the market we are in.
“We are innovating to stay ahead of the game and doing as much as we can.”
One innovation is the introduction of a customer loyalty card, and Christoforou said his team has been “taken aback by its success”.
Every time a customer spends more than £12 he gets one stamp, and six stamps results in a free bottle.
Christoforou is also pleased with the progress of Wine Rack’s website, which was given a soft launch in June ahead of a planned national advertising campaign in November offering Christmas promotions.
The website represents just 4% of turnover but Christoforou expects that to change over the next 12 months.
He said: “By next year, I would like to say that hopefully the estate has grown by four or five stores and hopefully our web sales have gone in the right direction.
“We are focused on keeping the range fresh and exciting, offering value for money and honest promotions and constantly doing new things.”