Why shoppers can expect steeper discounts on their booze as Dan Murphy’s, Liquorland owners vie for dominance

West Australians can expect bigger discounts on their booze as the companies behind the nation’s major bottleshops vie for dominance amid the cost-of-living crunch. Liquor chains owned by Coles — Liquorland, Vintage Cellars and First Choice stores — have long struggled against Endeavour’s dominant Dan Murphy’s and BWS in growing sales. But retail expert Gary Mortimer reckons it’s now a level playing field, with both companies hit by weak spending as the threat of higher-for-longer interest rates forced many people to further tighten their belts. Coles and and Endeavour released their latest financial results last week, which Professor Mortimer said revealed “very subdued” trading. “I think . . . we will see stronger price promotion moving forward so shoppers should expect to get better deals,” he said. “We may see the growth in private label (for) beer, wine and spirit products . . . I think we’ll see shoppers move away from maybe an Oyster Bay Sauvignon Blanc to a private label Sauvignon Blanc. They will start to trade down.” Professor Mortimer expected Endeavour to report stronger results given Dan Murphy’s had better brand recognition compared with Coles’ liquor chains. “But it just goes to show that it doesn’t matter who runs the brand, if it’s in a discretionary category, it’s very exposed to families that are trying to save money and pay down debt,” he said. “I think currently (families) are more concerned with putting food on the table, putting fuel in the car and paying bills than buying alcohol. “A bottle of wine is always nice to have but it’s not a necessity.” Coles chief executive Leah Weckert said growth in the liquor category had been in decline for a while. “We absolutely are seeing a shift towards cheaper drinks. Think prosecco is all the rage versus champagne,” she told The Sunday Times. “What we’re finding is that customers have a certain amount to spend each week and what they want to do is be able to buy the same number of drinks . . . and so trading down into cheaper options enable them to do that.” Her comments were echoed by the boss of Endeavour, which owns a combined total of about 1725 Dan Murphy’s and BWS bottleshops. “You are seeing down trading across a number of categories,” Steve Donohue said. “Probably the most acute is in the champagne to sparkling wine space. I’ve talked before about the material price increases that have flowed through in French champagne at a time when consumers really are challenged from the cost of living standpoint.” Last September, Coles announced it would fold some of its Vintage Cellars and First Choice stores under the better-known brand in a bid to close the gap between its bigger rival Endeavour. Ms Weckert said it was pleased with the early results of the simplification of the brands.