Woolies moves into liquor market

Johannesburg – Retail group Woolworths Holdings [JSE:WHL] said it is investigating opportunities in liquor retailing after successfully selling wine for some time.    

This comes shortly after the group announced it had discontinued its pharmacy project, which was undertaken in partnership with private clinics group Netcare.   

"We've sold wine successfully for some time," said Woolworths MD for the food division Zyda Rylands. "Our research revealed an appetite for an extended alcoholic beverage catalogue. We're assessing whether our store formats can accommodate the opportunity.

So far there are two pilot stores in place. One is in Blue Route in Cape Town and the other in Benmore, Johannesburg.

Potential pilot stores will be reviewed on an ongoing basis, said Rylands.

"We're trialling small convenience stores, in or next to existing Woolies stores, and offering our customers the convenience of a one-stop shop," she said. "The selected range includes best-selling branded spirits and beer, as well as Woolies wine."

Liquor retailing has become a component of major food retailers' offering, with franchise group Spar having aggressively grown its liquor division Tops over the past few years.

For instance, in the interim period to March 2010, Spar reported it had grown Tops by adding 28 new stores during the period, bringing the total number to 439. It also reported it had continued gaining market share in the division.  

Shoprite Holdings [JSE:SHP] and Pick n Pay Stores [JSE:PIK] have also made strides, selling wine inside their supermarkets while building a chain of stand-alone liquor stores next to the supermarkets.

 - Fin24.com