CONVIVIALITY ACQUISITION WILL IMPROVE WHOLESALE GIANT’S ‘HIGH STREET FOOTPRINT’
BESTWAY WHOLESALE bought Conviviality’s retail outlets because “they are all good, profitable businesses”, its managing director, Martin Race, said.
In an exclusive interview with Asian Trader, Eastern Eye’s sister title, 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 added.
Bestway’s priority is to stabilise the supply of stock to help the retailers get back to “business as usual”.
“There’s no need to turn the Conviviality business around just to develop it. Shoppers will give stores some leeway if they know what’s happening, but not too many chances if shelves are empty.”
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 explained. “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 said.
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.”
Bestway did not buy Conviviality with the intention to hive off any stores, he added. “We purchased these stores to grow their business. Our approach will always be what is best for the retailers and we 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.
“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 2,000 shares in Conviviality plc. But now that it has gone into administration, those shares are 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 explained. “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 said Bestway would work with all its current suppliers, who also serve Bargain Booze, as well as 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 these stores remain competitive in the high street,” he added.
Bestway has a range of own-label wine, ciders and spirits which will be available to Bargain Booze and Wine Rack retailers as part of its offer into their stores. 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 business will continue to be run by the team in Crewe as they have the knowledge and expertise, he said.
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, Race revealed.
For retailers like Hari Charn Sohal, who had been planning to increase his Bargain Booze franchise from three to eight stores this year, it has been a time of uncertainty. The traders were looking for reassurance so that they could keep expanding their businesses, Race said.
“We are excited to be working with the range of excellent retailers within the new businesses, such as Hari Charn Sohal,” he said. “Our message to them 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 shopkeepers like Sohal make this transition, Race said. “These are exactly the type of retailers we want – people who want to invest and expand their store estate.”
Race said he would reassure Sohal that Bestway has an “incredibly successful” track record of acquisitions in the wholesale sector, 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 more than 700 pharmacies across the country.
“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.