By George Simpson
Martin Race, managing director of Bestway Wholesale, has said the company bought the retail business of Conviviality because “they are all good, profitable businesses.”
In an exclusive interview with Asian Trader, the wholesale giant’s boss said: “Bargain Booze and Wine Rack have a fantastic alcohol offer and great customer loyalty while Select Convenience and Central are well-run, successful community c-stores.”
The acquisition will allow Bestway to increase its footprint on the high street and continue to offer shoppers value and choice, Race stated.
The main priority for Bestway now is to stabilise the supply of stock into the retailers, Race claims.
“There’s no need to turn the Conviviality business around just to develop it,” he said. “Shoppers will give stores some leeway if they know what’s happening but not too many chances if shelves are empty.”
Bestway is working with suppliers to increase stock levels at Conviviality’s Crewe warehouse, and also through Bestway and Batleys depots to help retailers get back to ‘business as usual’.
In the longer term, the group will be looking at how it can continue to drive growth in the Bargain Booze and Wine Rack stores.
“In the main, Bargain Booze was perhaps too reliant on alcohol and tobacco,” Race added. “Working with the retailers we will look at other categories to drive even more footfall and get the margin mix right, where appropriate, making these businesses even more profitable.”
Although Bestway had considered buying the wholesale arm of Conviviality, the group “decided that the retail arm was a better fit for the business, given our retail heartland and the opportunities, and are delighted with acquiring this fantastic business,” Race emphasised.
Conviviality’s Bargain Booze and Wine Rack stores will remain as two distinct brands, rather than being merged with each other or with Bestway’s existing retail brands Best-one and Xtra Local.
“Both are incredibly strong brands in their own right, admittedly targeting different demographics,” Race pointed out. “There are no plans to lose the resonance these brands have with their shoppers by rebranding them.”
Best-one and Xtra Local are all about the convenience offer with fresh chilled and ambient grocery all being at the heart of the offer.
Wine Rack and Bargain Booze are two brands which are synonymous with alcohol, and are two different models with different shopper needs.
“We purchased these stores to grow their business,” Race stressed. “Our approach will always be what is best for the retailers and will give them the best chance to grow their businesses further.”
The Conviviality estate is a mix of franchisees and company-owned stores. Bargain Booze is predominately a discount off-licence chain while Wine Rack is more up-market licensed specialist. Bestway did not purchase Conviviality with the intention to hive off any stores, Race told Asian Trader.
All the company stores in the Conviviality estate will be retained and Bestway will use its shared learnings and knowledge from our own symbol estate, combined with those of the Conviviality stores, to enhance the full offer and make them convenience destinations, Race says.
“With franchisees, it may not be their brand but it’s their businesses and they will do anything to keep their businesses going,” he added. “Our message is clear – we will get them back on an even keel, get supplies and great availability into their stores, and work with them to ensure they grow footfall and sales.”
Conviviality’s Build a Better Business Programme gave Bargain Booze franchisees the opportunity to be granted up to 2000 shares in Conviviality plc.
Now that Conviviality has gone into administration, those shares are now worthless.
“Bestway is a private – not listed – company and therefore while it is it is unfortunate that retailers have lost their shares, we will not be offering any shares,” Race commented. “We are however committed to helping them get back on track, developing their businesses and driving more sales and profitability for each retailer.”
While Bargain Booze does not have an own label range, it is a brand-led business with some exclusive brands. Race says Bestway will work with all its current suppliers, who also serve Bargain Booze, and also new suppliers, to ensure it retains the “excellent” Bargain Booze and Wine Rack offer to shoppers.
“Shoppers of alcohol want great brands at great prices, so we will be working with suppliers to ensure that these stores remain competitive in the high street,” he added.
Bestway has a range of own-label wine, ciders and spirits which we will be available to Bargain Booze and Wine Rack retailers as part of our offer into their stores if the retailer should want them.
“But our focus will be on delivering continuity and this means giving retailers access to the stock they need, so they can trade immediately, and ensuring great availability,” said Race.
Bargain Booze retailers previously had to buy all of their goods from Conviviality.
There are service level agreements already in place with Bargain Booze and over the next few months the Bargain Booze business will continue to be run by the team in Crewe as they have the knowledge and expertise in place.
What will differ is that all the stores acquired will in time also have access to a much wider range of non-licensed products through Bestway, which will hopefully help them to drive growth in sales and footfall, Race says.
For retailers like Hari Charn Sohal who had been planning to increase his Bargain Booze franchise from three to eight stores this year, this has been a time of uncertainty. These traders are looking for reassurance that they can keep expanding their businesses.
“We are excited to be working with the range of excellent retailers within the new businesses, such as Hari Charn Sohal,” Race responded.
“Our message to them all is that they are in much safer hands now and we are confident we will be able to give them the support they need to develop their businesses and realise their ambitions.”
Bestway has the scale and expertise as one of the only national wholesalers in retail to help retailers like Hari make this transition, says Race. “These are exactly the type of retailers we want; people who want to invest and expand their store estate,” he added.
Race would reassure Sohal that Bestway has an “incredibly successful” track record of acquisitions in wholesale, including Batleys Cash & Carry in 2005, Martex and Bellevue in 2010, and Sher Brothers in 2014, not to mention Bestway Group’s 2014 acquisition of Co-op Pharmacy’s chain of over 700 pharmacies.
“We continue to invest in all our businesses to drive growth and have never let any of our businesses or customers down by selling a business,” he said.
