Thinking of Buying a Liquor Store Business in Australia? Here Are 3 Vital Questions to Ask

The Australian liquor retailing industry generated $18.1 billion in revenue in 2025, with profit margins averaging 5%. While revenue surged during the COVID-19 pandemic due to on-premise closures, normalisation has since reduced sales volumes. Health consciousness, rising living costs, and competition from online liquor retailers continue to reshape the market.

Revenue is projected to grow modestly at 0.6% annually through 2030, reaching $18.6 billion. Endeavour Group and Coles dominate with more than half of market share, but independents are increasingly joining banner groups such as IBA and Liquor Marketing Group to gain scale and marketing strength.

1. Is the Business Financially Sustainable?

Why It Matters

Liquor retailing operates on thin margins and high purchase costs. Purchases account for the largest expense, followed by wages, rent, and utilities. Independent stores often struggle to match big-box competitors like Dan Murphy’s and First Choice Liquor Market, but those specialising in premium and niche products can achieve higher returns.

What to Check

• Revenue and margins – Compare performance against the industry average margin of 5%.
  
  

• Purchases & input costs – Review exposure to rising wholesale alcohol prices and reliance on discounting.
  
  

• Wage management – Assess labour costs, particularly if casual staff make up a large portion of the workforce.
  
  

• Resilience – Check whether the business adapted well post-pandemic and maintained profitability despite slowing demand.
  
  

2. Does the Location and Market Position Provide Competitive Advantage?

Why It Matters

Store success relies heavily on location, branding, and customer loyalty. Victoria and New South Wales account for over 70% of all liquor retailers, benefiting from large populations and deregulated licensing rules. In contrast, Queensland restricts licences to hotel operators, limiting competition but reducing growth opportunities.

Independents can thrive by offering unique selections, premium spirits, and strong community connections.

What to Check

• Location strength – Assess proximity to shopping centres, transport hubs, or high-income suburbs.
  
  

• Competitive landscape – Review the density of nearby Coles, BWS, and Dan Murphy’s outlets.
  
  

• Banner group affiliation – Determine whether the store benefits from economies of scale through IBA, Liquor Legends, or other groups.
  
  

• Customer loyalty – Examine reviews, repeat business, and membership program effectiveness.
  
  

3. Is the Business Aligned with Industry Trends and Future Growth?

Why It Matters

Consumer demand is shifting toward premium, craft, and low- or no-alcohol products. Online liquor retailing is expanding rapidly, with over 190 operators in Australia. Major chains are investing in ecommerce and delivery partnerships, while independents risk being left behind if they do not embrace digital sales.

What to Check

• Product mix – Assess balance between mainstream beer and wine versus premium spirits, craft, and no-alcohol products.
  
  

• Technology & online sales – Review adoption of ecommerce platforms, click-and-collect, or partnerships with delivery apps.
  
  

• Compliance – Verify licences, Responsible Service of Alcohol training, and adherence to state-specific liquor laws.
  
  

• Sustainability & branding – Look at initiatives such as recyclable packaging, local sourcing, and targeted marketing strategies.

Ready to Invest in a Thriving Liquor Store Business?

With stable long-term demand, banner group support, and rising consumer interest in premium and niche products, liquor stores remain attractive investments.

Long-term success depends on strong location, effective cost management, and adaptability to online and health-conscious consumer trends.

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