Coles Liquor: The Move Its Biggest Rival Already Made

This is episode 19 of Making Moves, a weekly mini-podcast where Ne-Lo co-founders Ross Hastings and Kieran Antill pick a company making an interesting strategic move and interrogate it. Unscripted, unedited, under 15 minutes. The Coles and Liquorland episode was recorded on 28 August 2026.

This week: Coles and Liquorland.

The move, and the numbers underneath it

Coles is bringing its liquor business closer into the Coles experience. The pitch is a more integrated food and drink proposition, with liquor, groceries, and loyalty pulled into one trip. New collocated sites are opening. Others are closing, which suggests a deliberate view about which locations this works in.

The numbers give it away. Supermarket sales are up, EBIT is up, EBIT growth is up. The equivalent liquor numbers are down. So one reading is simple: how do we better ride the coattails of the business that is actually working? Dan Murphy's has only gone from strength to strength in the destination space. Liquorland is not going to win big box. Once you accept that, collocation is less a bold choice than a foregone conclusion.

Someone is already doing this

Taken in isolation, it is a legitimate move. The insight is sound. People buy food and drink together, and there is nothing strange about the booze aisle sitting inside the weekly shop. That is how it works in the UK, and how Aldi does it here, usually without separate branding at all. You keep the off licence for the bottle of wine you forgot, and the specialist for anything top shelf.

The problem is the elephant in the room. BWS sits inside a large number of Woolworths stores in exactly this arrangement, and has for years. So the move is not really an integrated food and drink proposition, because that has always been the case. At best it is a focus effort, a decision to stop doing anything outside that core proposition.

There may be a structural argument underneath it. Coles owns the full stack. Endeavour Group and Woolworths are separate ASX listed companies, whatever equity connection remains between them. Better margins, tighter control, no landlord risk. If you were choosing which position to own, though, we would take the Woolworths one. Nothing stops Endeavour also collocating, and that is exactly what it does. It runs both plays. Coles is running one.

What would have to be true

To borrow from Roger Martin, what would have to be true for this to be a good idea? Mostly, the experience.

On limited personal observation, the BWS sites inside Woolworths are far more integrated into the shopping trip than the Liquorland sites inside Coles. Maybe that is an age of site issue. Maybe it is exactly what the closures and openings are fixing. But that is the root of it. You want to push your trolley out of the food aisle and into the liquor aisle, pick up your beer, and keep going. There are point of sale technicalities and regulatory ones, and Australian rules mean it can never simply be the liquor aisle. Worth noting that half the soft drink aisle is zero alcohol now anyway, so the flow is already there to build on.

Which raises the branding question. If the experience really is seamless, why maintain a separate naming convention in the middle of it? The merging of First Choice, Vintage Cellars, and Liquorland produced one of the saddest rebrands we have seen, stripping decades of equity out of three names and landing on a black and white tombstone of itself. Collocation might be the right business decision. It still leaves you asking what a brand called Liquorland is now for.

Price leadership means letting go of premium

Coles has framed this as a convenience and price play, and ownership of the full stack should let it compete harder on price while holding margin.

But the brand has been skittish. Part of its heritage, and most of what the Vintage Cellars work was protecting, is premium. Price leadership attached to your supermarket shop is a different strategy entirely. This is a winding back of where the brand was once trying to go. From the outside that looks like a retraction. From the inside it is different P&Ls, different ownership structures, and people trying to hold on to different things, which usually ends in compromise.

If it works, it is destabilising. If Coles can beat Dan Murphy's on price, the reason to drive out of your way to a destination starts to erode, and that would cause real problems for a monster of a brand.

The single brand advantage

There is a wider pattern here, and we see it with clients. The dangerous challengers in a lot of markets right now share a profile: deep pockets, often private equity backed, and a single brand carrying everything, sometimes across both B2B and B2C.

Incumbents tend to have more complicated brand architectures. They are not just being outspent. They are being outspent by a rival concentrating every dollar behind one name, while they spread theirs across several. Seen that way, Coles focusing all of its spend on getting people into Coles, and taking the liquor sales that follow, beats funding and feeding a separate brand alongside it. That may be the most interesting thing to watch here.

Making Moves is a weekly mini-podcast from Ne-Lo, Australia's repositioning consultancy. New episodes every Friday.