A reinvigorated Oddbins is in its longest period of sustained growth for six years, and expects to break even this year, the company’s managing director says.
Oddbins chief Simon Baile responded combatively to still-prevalent rumours of supply-chain problems, staff discontent and wholesaler jitters about the firm’s credit-rating by saying the chain is ‘on the right road’.
He said that thanks to a renewed focus on small, family-oriented producers, the UK drinks store chain had experienced sustained double-digit retail sales growth in the first quarter of 2010.
This was accompanied by a ‘consistent increase’ in footfall and an average bottle price nudging £8.
Online sales had surged by 38% over the same period, with the growth rate expected to accelerate when the company’s new website goes live later in the year.
Baile said the change had come following an 18-month review of Oddbins’ range, reducing the number of products from about 2,000 in October 2008, to about 1,200 at the end of 2009.
He expects the range to total 800-900 products by the end of the review process, which has seen an injection of wines from smaller, family producers, and a move away from price-sensitive big brands.
‘Tesco can always undercut you, so don’t do the big brands, go off on a different route. Once you get the product right, then the staff are on your side, so you get the enthusiasm back,’ Baile told decanter.com.
Oddbins’ French, Spanish, Italian, Australian and New Zealand ranges have been ‘completely refreshed’ Baile said, since he took over 18 months ago following the sale of the business by previous owner Castel.
The result has been like-for-like sales growth in recent weeks of 68% for Spain, 15% for Italy and 19% for France. Bordeaux and Burgundy sales have risen by 59% and 23% respectively.
Responding to rumours within the industry and on the web that payments to suppliers were irregular, Baile was emphatic. ‘This is Oddbins, and there will always be rumours,’ he said.
‘Ultimately, is Oddbins on the right road? Yes, it is. Did this company lose £10m in 2006 when it was owned by Castel? Yes, it did. Do we expect to get over the break-even line this year? Yes.
‘Are there problems with suppliers? Not really. You always get a problem with a supplier from time to time, whether you’re Boots, Oddbins, no matter who.’
He added that, according to a recent check with a credit rating agency, his company is a ‘significantly better payer’ than the industry average.
Written by Richard Woodard