And so it comes to pass. First Quench, the owner of Threshers and Wine Rack, have announced that they are to go into administration.
The news comes as no surprise to those of us who have watched the retail giant lumbering along a path towards irrelevance over the past few years. And yet for those thousands of employees who work across the group’s 1300 outlets the news will no doubt cause a great deal of anxiety.
Perhaps predictably, First Quench released a statement on Wednesday saying that “it is no secret that the credit crunch has made a very competitive marketplace even more challenging.” But First Quench’s problems run much deeper than any fissures created by the financial crisis and it would be disingenuous of them to suggest otherwise.
The company’s financial results throughout this decade have been poor, its management teams have come and gone too regularly and its ownership has changed hands too often. No, this is a story of the proverbial oil tanker – the Woolworths of the wine world.
Quite simply, they have run out of ideas. The stores are generally small, poorly presented and offer a limited range of unimaginative wines. The supermarkets offer the same wines at cheaper prices and in recent years their only weapon has been the “bargain booze” option of unprofitable and unsustainable 40% off deals.
But Supermarkets don’t just win on price alone, they win because they recognise the significance of data in the role of marketing products to consumers. First Quench never understood this. They have little concept of lifetime value, loyalty and targeted marketing. I’m sad to say that the company is a paid up member of those bricks and mortar retailers who have been left behind by the digital age.
First Quench must take some stick on the mismanagement of their customer strategy and their failure to turn massive footfall into marketable data.
I have my own association with Threshers. Two winter ago I was employed as a consultant to sense check their business plan for a proposed eCommerce operation.
I found the Business Development team to be bright, energetic, driven and eager to take the jump into the unknown but I also sensed a senior management team for whom the digital revolution was something that “other people” participated in. My involvement was a brief one and the eCommerce operation never materialised.
The UK wine world doesn’t need to see another casualty on the high street but conversely the wine customer has been poorly served by Thresher and Wine Rack. If the supermarkets pick up the lions share of the group’s £800m turnover then life for the UK wine drinker will be all the poorer for it.
So that leaves us with Oddbins and Nicolas on the high street. Good luck to them both.
