Independent Sydney-based retail group Red Bottle enjoyed another successful year in 2023, kicking off with the opening of its 12th retail store in February.
“Located to take advantage of the future metro rail expansion in the CBD, this new premium wine and spirit store continues to grow and is quickly establishing itself in its local area,” says Andrew McKay, Associate Director.
Although Sydney’s post-pandemic bounce back has afforded Red Bottle the opportunity to expand, McKay says that the continued ability to work from home has seen a significant decrease in corporate spending on entertainment and office drinks.
“As working from home becomes more entrenched, we see fewer office workers in the commercial heart of Sydney, which means we will continue to evolve into community-based stores that understand their local demographics and cater to the needs of the local community.
“Following some interesting licensing decisions, we are seeing the emergence in many neighbourhoods of smaller specialty grocery stores incorporating liquor into their retail offer, which will impact the retail landscape in NSW.”
Tastes and trends
Reflecting on the last 12 months of liquor retail, McKay says that category crossover gained momentum in 2023, a trend that Red Bottle will continue to capitalise on in 2024.
“[In the RTD space] we have seen how suppliers from more traditional categories have been moving into new areas to diversify their portfolios and offerings. Breweries have leant into the seltzer and ginger beer markets, and spirit companies have segued from classic spirit/soft drink mixers into a range of hard/’spiked’ versions of non-alcoholic alternatives.”
Faced by economic pressures, McKay acknowledges that customers are making the choice to trade down, particularly in spirits categories, and retailers will need to adapt their ranging and promotional activity to reflect these economic changes.
“For 2024, we will see Australian distilleries moving away from the premiumisation trend towards better value ranges that will speak to provenance and quality. Archie Rose has led the way this year with great success, and I think we’ll see others follow.”
As customer preferences shift and new trends emerge, McKay says Red Bottle will focus on the needs of its local customers in its 12 individual locations to succeed in the year ahead as a community-based retailer.
“Faced with a better educated and more informed customer, I believe we must continue to build on our core values of good old-fashioned customer service, knowledgeable staff and being a trusted advisor to our customers.”
Digital age
Despite the continued acceleration of online shopping and digital conveniences, McKay says that e-commerce only acts as an ancillary part of the Red Bottle business.
“We’re happy that the big guys are paving the way in these unchartered e-commerce waters. In the broader liquor industry space, the relationship between e-commerce and responsible service is still being worked out, and we don’t want to ruffle any legal feathers.
“At Red Bottle we want to ensure that we are always adopting best practices. Being members of Retail Drinks Australia, we can ensure that we are within all boundaries of liquor retail and striving to do things the right way.”
This article originally appeared in the 2024 Leaders Forum issue of National Liquor News.
