Dan Murphy’s co-founder and wine merchant Tony Leon is returning to the retail game

Some people just weren’t made to gracefully retire, and Dan Murphy’s co-founder and wine merchant Tony Leon is not one for the golf course, so he’s back in the wine game with a new venture.

Some people just weren’t made to gracefully retire and take up golf, devoting their ‘winter years’ to grandchildren and gardening. And Tony Leon is just such a man.

“I need something to do because I’m hopeless, and I don’t play golf”, the 67-year-old co-founder and former boss of Dan Murphy’s liquor chain told The Australian as he was packing his suitcase to return to his homeland of Lebanon for a month’s holiday.

“I know how to sell a cask of sherry or VB to an older man or woman, and I can sell Château Mouton Rothschild to the world.”

Leon, who helped grow Dan Murphy’s from one store to 88 to make it into a national retail juggernaut owned by Woolworths, and who also for a spell ran the liquor business for Coles, is getting back into the wine retail game. Credited by many in the industry as one of the best retailers in the country, Leon has his eye on taking customers from both his old shops Dan Murphy’s and Coles Liquor.

“You know business is business, I still have a lot of friends in Dan’s and a lot of friends in Coles. If they want to open a store next to me, they’ll take customers, or if I open next to them I’ll take their business but I’ll do the right thing, I have my integrity.”

Full of energy, he has told friends that if he gets bored touring Lebanon for five weeks he can jump online to trade in shares or “buy and sell things”. But upon his return he is taking up the new challenge of opening at least three new bricks-and-mortar wine stores that he believes will fill a gap not covered by Dan Murphy’s (now owned by the ASX-listed Endeavour Group) and the Liquorland, First Choice and Vintage Choice stores owned by Coles.

Tony Leon at a Dan Murphy's store in Alphington, Melbourne, in 2000. Picture: David Crosling

Leon, now the same age as retailer Daniel Francis Murphy when he joined him to work on the Dan Murphy’s shop floor, has joined with internationally renowned wine critic Jeremy Oliver to fuse together an online wine recommendation and reviews platform with a small chain of physical stores. Leon has been hired by start-up Oliver’s Wines to scout for a location for new wine shop locations in Melbourne, Sydney and Brisbane, and backed by a $3m equity raising to finance the store rollout, marketing and growth of its online presence.

What Leon and his partner, wine critic Oliver, are imagining is a smaller store that is to the wine industry what Apple is to technology. A physical wine store that is heavily focused and geared towards the “experience” of wine, where customers come to engage in the brand ecosphere and then continue to engage online.

“So it is the Apple model. The Apple model is very much that people will go into the Apple store maybe once or twice a year, check out a new product, but they are Apple customers and purchase regularly online,” Oliver told The Australian.

“We are trying to explore that which I don’t think anyone else has tried. Where you have a relationship with a brand, to become a fan of the brand and then purchase online from the brand.”

Wine critic and founder of Oliver’s Wines Jeremy Oliver believes there is a gap in the wine retail market not catered to by the major chains.

Leon and his new partner Oliver want to have a curated range of wines, and offer a more personalised experience and service to wine fans, as well as in the smaller stores have lectures and tastings, plus a wine bar.

They claim the giant liquor retailers operate large and impersonal superstores staffed by people who hardly know more about wine than their customers do, lacking the capability to deliver high quality recommendations and offering limited opportunity for customers to learn, explore and experience wine. They also think the heavy presence of private label wines – which are great for retail chain margins – is also a mistake and is not giving shoppers enough choice of quality, branded wine producers that are being crowded out.

Of course the likes of Dan Murphy’s would deny this, countering that their popular loyalty program and large range both in the store and offline is catering to diverse shopper needs and interests. Dan Murphy’s has also upped its game in training with 95 per cent of its wine merchants in its stores trained to Wine & Spirit Education Trust (WSET) qualifications. The big-box Dan Murphy’s has also generated gains in its market-leading voice of the customer metric which measures customer satisfaction.

Former Coles boss Ian McLeod, right, who helped lure Tony Leon to Coles in 2008 when it was owned by Wesfarmers, to help revive and grow its struggling Coles liquor arm.

Leon and Oliver want to offer a more bespoke approach to wine retailing with their perceived weaknesses in Australian wine retail providing an opportunity for new and creative competition with a customer focus.

Lebanese immigrant Leon, who arrived here from the war-torn Middle East in the late 1970s and admitted he was scared of Daniel Murphy when he first started working for him – “I did exactly what Mr Murphy told me to do” – counts loyalty as a core value, not only in business but also in life.

He does not directly or overtly criticise the current Dan Murphy’s and Coles liquor stores. But he does see areas in retail, such as customer interaction, wine ranges and just good old fashioned retail nous that he believes both liquor giants are lacking and which he can now exploit for his new burgeoning wine chain.

He also thinks the market is oversaturated with big-box outlets like Dan Murphy’s.

Wine critic and founder of Oliver’s Wines Jeremy Oliver, right, with Tony Leon, who together want to offer something new for wine drinkers.

“I think the big boys, Coles and Endeavour and even Metcash, are trialling a lot of things but Jeremy Oliver and I see very fine wine and premium wine as key. If you make a good fine wine, reasonable wine, you try to get it into Dan Murphy’s … it is very hard … and I talk to suppliers and they can’t get through (to the retail giants) on the phone.

“We will pick the wine, we are looking for a great value for $20, or $40 to $80. Dan Murphy’s is too big. We might have 2000 maximum different wines, and when I worked at Dan Murphy’s it had around 5500 SKUs including rare and imported.”

Dan Murphy’s today has around 2600 wine lines in a typical store.

“Dan Murphy’s is too big and overcomplicated. There is hardly enough room in Australia to have 200 or 300 big-box liquor stores in Australia, 160 or 180 is more than enough.”

Dan Murphy’s currently has 278 big-box stores.

He also sees the major liquor chains as pulling out ranges of wines from smaller producers to focus on bigger commercial brands that have impact with customers, backed by large marketing budgets and generating better returns for the retailer.

“The major retailers are cutting back to smaller ranges of core products from major brands, while the smaller independents are struggling to create a point of difference. So our timing couldn’t be better.

Tony Leon grappling with the Penfolds collection when at Dan Murphy’s in the 1990s.

“We can fill this niche and we have a story to tell. Australia’s wine retail landscape is ripe for change. While the number of quality small independent retailers continues to decline across all major cities, the big end of town isn’t finding it easy either.”

Oliver, who also once worked at Dan Murphy’s, is a globally recognised leading wine critic and known for his 19 editions of the best-selling The Australian Wine Annual. He believes there are massive opportunities for a smaller wine shop chain that is wholly dedicated to quality wine and in-store experiences.

“We can do things at a store level that are too hard for the big guys and too challenging for most of the smaller ones,” he told The Australian.

His Oliver Wines’ online platform is carving out a niche with a site that enables users to nominate favourite wines and to receive immediate recommendations based on their own preferences. It also enabled buyers to provide feedback on their purchases to further refine the platform’s ability to recommend to them uniquely as individuals.

It has developed and launched its curated ‘wine shop’, which features only wines rated by Oliver as being exceptional at their price. Now he has brought Leon on board to create a physical presence.

“A high-profile bricks and mortar presence can drive sales via our online platform in a way that is too hard to deliver when purely online,” Oliver says. “But a physical multipurpose operation featuring a wine bar plus event and education spaces will greatly help us create and nurture customer relationships. Visitors to our stores will discover our unique brand story and experience the depth and truly personalised nature of our online/offline presence.”

Leon has tried his hand at liquor chains after leaving Coles a decade ago, buying a stake in independent bottle shop Steve’s Liquor, which is now in the process of selling its stores. So he has more free time opening up on his calendar.

When Leon returns from Lebanon he will begin the search for store locations, with Oliver’s Wines initially hoping for three stores across Melbourne, Sydney and Brisbane but capacity for more as opportunities arise and shoppers – hopefully – embrace the concept.

Now himself almost 70, Leon still refers to the late founder as “Mr Murphy” when talking about him and recalls those lessons from the shop floor in inner-city Melbourne when Dan Murphy’s had just the single store. And he backs himself, despite going up against the big boys of liquor retail and at an age when retirement is a focus for many.

“I remember when I worked with Mr Murphy on the shop floor in Alphington or Prahran and I learned more working on the shop floor than if I went to get a PhD from Oxford … and I worked with people who had degrees from Oxford.”

Originally published as Dan Murphy’s co-founder and wine merchant Tony Leon is returning to the retail game