Foodstuffs opens stand-alone stores to beat spirits ban

Tony Carter believes stand-alone stores will be an excellent addition to his supermarkets.

Grocery giant Foodstuffs enters the $1.1 billion take-home liquor market next month when its first Duffy & Finn store opens in Wellington.

A second store will open in Pukekohe in November as Foodstuffs tries to break the liquor monopoly of the bottleshops.

Supermarkets can sell wine and beer, but are not permitted by law to sell spirits, including pre-mixed drinks and fortified wines.

By opening the stand-alone Duffy & Finn stores, Foodstuffs - which owns the Pak'n Save, New World and Four Square supermarket chains - will be the first of the big grocery companies to sell a full range of alcoholic drinks, as well as related products such as cigars and glasses.

Foodstuffs Auckland strategy and new ventures general manager, Rob Chemaly, said he expected Duffy & Finn would appeal to different buyers to those buying beer and wine in the supermarkets.

"There's a market segment we're excluded from and this is partly an attempt to compete in that segment," he said.

Managing director Tony Carter said the format would be an excellent addition to the supermarket chains.

Foodstuffs said it planned to open 10 Duffy & Finn stores in the lower North Island by the end of next year - on the same sites as its supermarkets where possible.

Chemaly said prices would need to be competitive to attract customers, but it had not been decided whether the new Duffy & Finn stores would undercut prices at Foodstuffs' supermarkets.

"What I can tell you is it [Duffy and Finn] will be competitively priced."

Foodstuffs' grocery rivals also have plans to enter the liquor trade.

The Warehouse now has two Warehouse Cellars stores - stand-alone liquor stores within its Red Sheds - at its Fraser Cove, Tauranga and Sylvia Park, Auckland, stores.

The stores do not sell spirits, but the company says it has not ruled out doing so.

The Warehouse plans to trial the Cellars concept further before introducing it at more of its 85 stores.

Woolworths Australia, which owns the Foodtown, Woolworths and Countdown supermarkets, has also said it sees opportunities in liquor.

It is expected to bring its stand-alone liquor chain, Dan Murphy's - a success in Australia - to New Zealand.