A smartphone app and deep discounts on wine and beer have helped the owner of Bargain Booze increase sales over Christmas despite fierce competition from supermarkets.
In the two weeks to 4 January, Conviviality Retail’s sales at franchise stores opened a year or more ago rose 1.2% and total sales rose 2.6%. Christmas trading marked an improvement on the six months to the end of October, when sales at stores open at least a year fall 1.7%.
Conviviality, which also owns the Wine Rack chain, said it benefited from customers shunning supermarkets for more frequent local purchases. Its Bargain Booze shops, run by franchisees, are typically small operations in residential areas.
Conviviality’s chief executive, Diana Hunter, said Bargain Booze’s app had been downloaded 4,000 times and had attracted customers with its special offers. Big discounts over Christmas included 15 cans of Carling lager for £7.99 and Harvey’s Crest red wine for £3.99.
“We had a very clear plan for Christmas. We are in populated residential areas where people stop off in our stores on the way home from work,” she said. “We play a very convenient role for our customers in the community and we did that.”
Conviviality’s shares rose 6% to 135.75p after hitting a post-flotation low of 127.5p on Thursday. The company floated at £1 a share in August 2013 and the shares peaked at £1.96 a year ago.
Alcoholic drinks were a major part of the battle between supermarkets in the runup to Christmas as Tesco sold champagne for as little as £8. Majestic, the wine warehouse chain with more upmarket customers than Conviviality, said this month its margins were hit as it cut prices to compete.
Hunter said the sales increase over Christmas was partly due to the increased demand the company usually sees over big events but after closing almost 100 stores in the past 18 months, business was improving.
About two-thirds of Bargain Booze’s fascias have been revamped to make them more inviting, particularly to women, she said.
Underlining the increasing importance of the internet to retailers, Bargain Booze will launch a click-and-collect service before Easter that lets customers order online and pick up goods in store.
“We are seeing encouraging signs of a stabilising the franchisee base and stabilising sales. There is a lot to come in the year but we are very pleased with the progress we have made,” Hunter said.
