Minimum Unit Pricing(MUP) added a £828 monthly margin boost to Ferhan Ashiq’s alcohol sales in his Day-Today Ashiqs store in Prestonpans, Scotland.
MUP was introduced by the Scottish Government on 1 May and requires Scottish stores to charge at least 50p per unit of alcohol in a product.
Analysis of Ashiq’s May 2018 and May 2017 sales data by Retail Express revealed his margins had grown from 22.6% to 29.60%. Extrapolated to all alcohol lines, the legislation adds £9,936.99 to his annual gross profit.
“The store had been underperforming this year and we’d been on the cusp of costs exceeding revenue. MUP has given us breathing space ahead of an upcoming refit that will add more food to go,” Ashiq said.
Read more: Download your free MUP calculator to check if your store is compliant.
Despite the price increases, alcohol sales volumes in Ferhan’s store grew from 2,405 units in April to 2,612 in May. Ashiq said the stats confirmed predictions that customers would move to independents from multiples.
“One man who’d previously bought cheap cider from Lidl now shops in my store because the prices are the same. I’ve seen increased footfall from the multiples,” he said.
While cider sales declined by volume from 622 in April to 338 in May, by value the category grew by 28.9%. The store de-listed heavily-affected cider lines at the
beginning of 2018.
Cider had accounted for three of the 10 bestselling lines before MUP, but just one of the top 10 afterwards. He said 10 and 12-packs of lager were the strongest performing
products post-MUP.
Ashiq said an indirect effect of MUP was a move away from price-marked packs.
Read more: One in four Scottish retailers were unprepared for MUP
Comments
This article doesn't have any comments yet, be the first!