From Tat to Vino!

[Gonzo]

I'm interested in a straw poll of the amount of cash CUKKERs spend on beer and wine and how much you spend on specialist wine, champers, spirits, cigars and alcohol related gifts products as I try and work out a model for a premium establishment.

Assuming business insurance of £1000 per year & bills at £3000 per year, based on myself working 40 hours per week and covering with staff the rest of the time, would I be better off purchasing the freehold, walking to work & working there myself or would I be better off contracting at an average rate of £400 per day for 42 weeks per year and commuting?

Are you absolutely sure that the sort of people that would want to make premium purchases would be comfortable talking to the likes of you?

[AtW]

Are you absolutely sure that the sort of people that would want to make premium purchases would be comfortable talking to the likes of you?

Good point Gonzo: words "MarillionFan" and "premium" are highly likely to be found in the same sentence that also contains word "NOT"...

[Gonzo]

Good point Gonzo: words "MarillionFan" and "premium" are highly likely to be found in the same sentence that also contains word "NOT"...

I was taking the mickey.

I have actually met him and do think that he would be able to play the part if he wanted to. Everything with MF is one big acting job. Or should I say one big acting-up job?

But, shhh. Don't tell him I said that.

[Bunk]

I've just had a think. Way before I got poorly, when I was living it large.

I think I was doing around GBP 5000 pa on booze!

That's pretty much the figure I came to off the top of my head. £100 is easy to spend on a night out in London. One night out a week means £5200 a year. Obviously sometimes I spend less, sometimes I spend more, sometimes I go out more than once a week, sometimes I have a whole week off but I reckon it's not far off. When you add in taxis home it's probably more like £6500.

[Paddy]

Rightio the figures are in. Who wants to invest?

Looks like the existing business does £240000 per annum. It is open for 72.5 hours per week and operates 60% of the time under one member of staff who is probably on 30% more than average wage. The other 40% there are two staff. It is believed that the upside would be another 20%.

The GP is approx 28%.

The property is on the market for £210,000 and is rented out at £18,000. By buying the freehold I do not have to pay the rent. The amount borrowed would be at an average rate of 0.48% above base. The rates payable are £3600 per year.

Assuming business insurance of £1000 per year & bills at £3000 per year, based on myself working 40 hours per week and covering with staff the rest of the time, would I be better off purchasing the freehold, walking to work & working there myself or would I be better off contracting at an average rate of £400 per day for 42 weeks per year and commuting?

One of my shops is empty (I own the freehold) the business rates if I open it would be £12,000. I have done the figures for an Off Licence and found it can’t make a profit even with zero rent. A Tesco Express Petrol Station has opened up half a mile away selling cut price drinks.

My cousin’s shop in London; rent £36,000 Rates £22,000, it went bust after Tesco Express opened two doors away. Even if you drop your prices; people with still go to Tesco because they think that it is cheap.

In the 80s I used to import wine a beer by truck load. After selling to Safeway (long gone supermarket chain) they started importing their own. It is a very difficult business to be in particularly as there are cartels among brewers, suppliers and retailers. I don’t think you can make a profit by buying at Booker Cash and Carry nor would I recommend being a member of any franchise.

If you make your figures work out, please let me know and I will open up empty shop. But for now, I'm out!

[doodab]

At my peak I was out 4 or 5 nights a week usually spending £100-£200 or more, not all on booze as that would often include some food & a cab home, but I reckon I was clearing at least £25k a year on booze. These days it's more like €100 a week because beer and wine are cheap in Germany and I'm trying to take it easy so I limit myself to probably 3-4 bottles of decent scotch a year and a similar number of cocktail nights.

I would say the main flaw in your plan is that targeting a niche in the booze market puts you up against existing specialist retailers with a great deal of expertise and you will find it difficult to compete on quality and service unless you have a comparable level of knowledge. When dealing in fine wines you need the expertise to buy them young and either cellar them for sale later or sell them straight away and provide a proper storage service until they are ready to drink. You will probably need to deal direct with vineyards in some cases, which will require good language skills (I have some inside information on how this works by virtue of a friends wife who does this for a living)

You will also need a lot of stock. Stocking a range of whiskeys comparable to a decent specialist whiskey retailer will involve holding several hundred of thousands of pounds worth of stock, some of which might not turn over very rapidly. I would guess my local specialist wine shop holds at least a million of pounds worth of stock, a fair chunk of it will be in storage for several years before it's ready for sale. They also sell high quality glasses and offer delivery and glass hire for parties etc as well as a limited range of high quality spirits and cigars. They don't sell crisps and nappies but then they aren't the sort of place that gets a lot of passing trade.

Of course, there might be a massive lack of such things where you are, but in my neck of the woods these niches are already pretty well served. It would take a serious undertaking to compete with what is already on offer and in terms of investment you are talking a lot more than a nice retail space and some optimism.

[MarillionFan]

One of my shops is empty (I own the freehold) the business rates if I open it would be £12,000. I have done the figures for an Off Licence and found it can’t make a profit even with zero rent. A Tesco Express Petrol Station has opened up half a mile away selling cut price drinks.

My cousin’s shop in London; rent £36,000 Rates £22,000, it went bust after Tesco Express opened two doors away. Even if you drop your prices; people with still go to Tesco because they think that it is cheap.


If you make your figures work out, please let me know and I will open up empty shop.

It depends on where it is. As it happens this off licence about 200 metres from a Tesco Express Petrol Station which I wish I owned. I've estimated that it's doing at least 25-30k a week without petrol!!!! It's been there about 4 years. It killed two convienience stores in the immediate location. It is right next door to the busiest fish & chip shop in the area though and has parking right on the road.

Wine Rack competed on price/bargain booze. They lost out because the margin was too low on 2 for 3 etc

If you're paying 12k rates, then the 'rent' you have been offering must be near £24-£30K. You'd need volume to cover that & staff.

Some interesting stuff on Daltons.Only a few 'bargain booze' businesses up for a sale, massive turnover from small locations. £900k, £100m, £495k all of places with rent similar and less than £30

[MarillionFan]

Of course, there might be a massive lack of such things where you are, but in my neck of the woods these niches are already pretty well served. It would take a serious undertaking to compete with what is already on offer and in terms of investment you are talking a lot more than a nice retail space and some optimism.

Nothing in this area or even close. It's been an offy for 30 years and even with the arrival of a Tesco Express was still exceeding it's Wine Rack targets (I knew the manager).

It looks like it could be profitable, in the region of £60-£80k after everything except wages. Wages would be around £40K. So you are looking at £20-£40k net profit. Where you could rent for £18-£20k with no hassle(if you could keep a tenant).

My opinion is, buy the freehold and rent out as per lease. Hope that the encumbant renews the lease. Worse case, they don't renew, try and get a new tenant. Then if after 3 months, the rates kick in so consider stocking it yourself. As it's already fitted & I already have tills/security system etc, it's really just the cost of signage, advertising and booze!!!!

[Moscow Mule]

Specialist booze retailing is going internet only.

If you haven't already got a reputation in your area, I'd say your business is likely to fail.

[Moscow Mule]

Girly has been telling me for years above 50 units a week and you are going to eventually hit a problem, I have been drinking 50+ for a couple of decades and I can still run a marathon and hold down a 6 figure salary.

It's when you stop running marathons & keep drinking that you will be ****ed.