Dan Murphy's

Dan Murphy's is an Australian liquor supermarket chain owned by Woolworths Limited, with more than 200 stores across the country. Woolworths also owns BWS, another liquor chain with smaller stores. Dan Murphy's competes principally with Wesfarmers brands 1st Choice Liquor Superstore and Liquorland. The business offers a "lowest liquor price guarantee"^[1] and promises to beat any competitor’s advertised price.

History

Daniel Francis Murphy, a winemaker, journalist and founder of the first wine club in Australia, learned the trade working in a liquor store owned by his father Timothy Murphy. In 1952, Dan Murphy opened his first liquor store. Located on Prahran's Chapel Street, it was just a few hundred metres away from his father's store.^[2] Murphy was heavily involved in the Australian wine industry, and he was a friend to influential winemakers, including Maurice O’Shea and Max Schubert.^[3]

After growing his business to five stores across Victoria, Murphy sold his business to Woolworths in 1998.^[4] The business has since contributed to the formation of an oligopoly in the Australian liquor market, with concerns about the ability of smaller liquor retailers to compete.

Stores

As of 2016, there are 215 Dan Murphy’s stores operating across Australia: 66 in Victoria, 62 in New South Wales, 48 in Queensland, 19 in Western Australia, 16 in South Australia, 3 in the Australian Capital Territory, and 1 in Tasmania.^[5]

In addition to its physical stores, Dan Murphy’s also operates danmurphys.com.au, which is responsible for more than 50% of online sales of alcohol in Australia.^[6]

In 2016, Woolworths opened The Dan Murphy’s Cellar.^[7] Located in the cellar of Dan Murphy’s original Prahran store, The Cellar focusses on boutique and premium liquor products.

Services

My Dan Murphy’s

Dan Murphy’s launched My Dan Murphy’s, its customer rewards program, in 2014. As of October 2016, the program has more than 1.7 million members.^[8]

Connections

In 2014, Dan Murphy’s introduced its online Connections service.^[9] This allows small or international producers to sell their products directly to customers through the Dan Murphy’s website.

Lowest Liquor Price Guarantee

Dan Murphy’s offers its customers a "lowest liquor price guarantee"^[10] and promises to beat any competitor’s advertised price – provided the competitor’s store is located within 10 kilometers.^[11]

Criticism

Dan Murphy's pricing strategy sparked an anti-competition problem in 2003, with industry analysts claiming that Woolworths and Coles were seeking to bankrupt rival liquor retailers, mostly by lowering prices of wine.^[12] The business has admitted to selling liquor at times below cost to "aggressively drive sales".^[13] Furthermore the original Dan Murphy had a similar strategy with his below cost marketing being cross subsidised by fraudulent avoidance of Sales Tax to the detriment of his competitors who could not match his prices.^[14]

Another major concern amongst rival liquor retailers has been Woolworths' aggressive acquisition strategy, buying-up small independent stores to increase market share against main rival Coles Group,^[15][16][17] or opening up new stores, placing pressure on existing retailers by taking away sales.^[18] In Woolworths' 2006 Annual Report, the company reported 15 new Dan Murphy's stores had opened in the reported financial year, taking the total to 56, and that the company had the sites and licences to have more than 100 stores open within the next two to three years.^[19]

References

External links

• Dan Murphy's