Industry sector: Retail and wholesale

Off-licence: Market research

When you plan your off-licence business it's very important to find out as much as possible about your potential customers by doing some effective market research.

Estimating demand

You will need to find out whether there is going to be enough demand for your off-licence in the area. First check out the competition. Count how many outlets there are already in your area selling alcoholic drinks. Don't forget forecourt shops - more and more of these are becoming convenience retailers that sell alcohol. And of course supermarkets are likely to be among your fiercest competitors, including their growing chains of local c-store outlets.

Pay particular attention to businesses which stock a similar range of products to the ones you intend to stock. Depending on the focus of your business these could be upmarket wines, unusual spirits or perhaps just good value everyday drinks.

Catchment area

Note down the different types of potential customers living and working in the area where your business will be. This will help you to determine the range of products and services that you will offer. The major off-licence chains tailor the products they sell to the local customer base. Compare the different product ranges in different areas to get an idea of what you might offer your customers.

Why will customers choose your off-licence

You need to make sure that enough customers will choose your business rather than other existing outlets. Check out the competition to see:

  • what range of alcoholic and soft drinks they offer
  • what other product ranges they stock
  • what prices they charge
  • what are their opening hours
  • what type of customer are they attracting
  • if the premises and fittings are modern and smart
  • what services they offer

This might immediately show you that there is a gap in the market for a certain type of off-licence. For example, perhaps none of the outlets in your area offers a wide range of unusual premium beers. Or perhaps none has catered for the growing popularity of craft beers and spirits, particularly craft gin. Think about other services you could offer that might be popular with customers and may help to drive footfall - for example a cash machine and a local delivery service.

Find out what people want

It is a fact of life that the small independent outlet is finding it increasingly hard to survive. It is essential that you talk to as many local people as possible to find out:

  • what range of products they would want you to stock
  • what opening hours would suit them best
  • what, if anything, don't they like about the existing off-licences in your area

Use the Record sheets to help you with your market research.