In late 2023, Bestway launched its first Costcutter Wine Rack hybrid store. The move followed the roll out of several Costcutter Bargain Booze hybrids. Lucy Britner caught up with Bestway’s retail director Jamie Davison at last week’s showcase in Coventry to get an update on all things hybrid

Drinks Retailing: How many hybrid stores do you have now?

Jamie Davison: We’re up to 20 sites with Costcutter Bargain Booze and we have one Costcutter Wine Rack, which opened in November. We’ve got some IT work in development that finishes in June and will make the ease of operating a hybrid better for retailers.

DR: How do you describe the difference between the two?

JD: Wine Rack is for a more premium demographic – the range of wines and Champagnes is heightened. It’s definitely about spirits and the wine range in particular. Bargain Booze is still very strong in spirits and strong in wine but more of a core and slightly more premium but not super premium range.

DR: How many hybrid sites do you plan to open?

JD: I don’t like throwing numbers out there. Of course, we’ve got ambition but it’s not a numbers game. We’ve actually knocked back quite a number of stores because what we’ve recognised in the two years that we’ve been developing this concept is that we’ve got something the business needs to protect. Of the 20 Costcutter Bargain Booze stores, five have been recognised with major industry awards. I don’t want to dilute that. It’s about working with the right retailer. And it’s a sizeable part of our business – what we’ve identified is that although smaller in numbers, when you look at the turnover and the wholesale purchasing from those stores, they are three times the normal performance. We’re just doing our budgets for the next 12 months and there is absolutely a large step forward but I don’t want to rush it, flood the market and end up having to back out because we’ve gone with a wrong retailer.

DR: You mentioned growth in turnover, where is the market share coming from?

JD: I’ll use the example of Peter [Patel, Drinks Retailing Awards 2023 Convenience winner] who operates a hybrid Costcutter Bargain Booze. He and a lot of retailers that are similar like to trade against multiples. Their view is that they can compete on own label and on fresh, can beat on local and customer service and they can beat on alcohol. If the environment is there as well, then it’s dragging in the footfall from quite a clinical multiple experience into something that’s a bit more inclusive.

DR: You were recently quoted as saying the hybrid could potentially become a ‘franchise lite’ model. What does that mean?

JD: We have continued conversations with our franchisees about where they want to go, because the market continues to change. They tell us what they like about the franchise and where they would like a little bit more freedom. So, we’re looking at working with retailers especially on the back of the hybrid model.

This also forms part of the overall estate review. We’ve got stores that are in Costcutter that would be better as Best One, we’ve got Best Ones that might be better off as Costcutter. We’ve got stores in Bargain Booze that might be better as hybrid. At the moment, we’re looking at rather than being a rigid franchise, is there an ability to give retailers more freedom around some of the pricing and, not the core range and core promotional activity, but some of the wider range.

DR: Tell us about the recent Best-One revamp in Kingswood.

JD: It’ a company-owned neighbourhood c-store, managed by Emma Cherry who has been 22 years at the store.  It had previously been trading as a Central Convenience store and has now opened as a Best-One store, with the benefit of a Bargain Booze licensed proposition within the store, as an implant. The store has a ‘shop within a shop’ structure, in line with Bestway’s strategic approach to offer different formats for different business models, mapped to the customer demographics.

DR: The off-licence landscape has changed dramatically over the past 20 years. Where does the Bestway business see the future?

I think the hybrid model for us will be a significant part of the future. There’s a gap in the market for it and that’s what the industry has recognised as well. Alcohol across convenience is good but it isn’t great – that’s where we think we can help our retailers compete and create that better experience.