Coles has bought one of Sydney's most popular independent wine stores in a sign of further influence by the big chains over how and where shoppers buy their alcohol.
Ultimo Wine Centre was sold to Coles last week and reopened on Wednesday under the supermarket chain's brand Vintage Cellars.
As Coles and Woolworths continue to increase their market share - the two chains own more than half all liquor outlets across Australia - small players are feeling the pinch.
A 2010 report by consumer group Choice said 45 per cent of Australian liquor outlets were run by Coles and Woolworths, but a July 2012 report from the McCusker Centre for Action on Alcohol and Youth puts the figure at more than 58 per cent.
Coles spokesman Jim Cooper said in the past four years Coles had opened "about 30" liquor outlets, and was focused on "making sure the stores we have are in the right locations and are the right kind of store for that location as well".
A spokeswoman for Woolworths, which owns Dan Murphy's and BWS, said the company does not discuss market share, but ''growth has closely mirrored our supermarket openings and reflects our customers' desire for one-stop shopping''.
Terry Mott, the chief executive of the Australian Liquor Stores Association, said in the past six years in NSW the number of liquor stores had grown from about 1600 to about 2180.
"There's been a significant increase in the number of outlets but the overall market has been flat or declining so what that's led to is an increase in competition in a market that's effectively flat," he said.
Mr Mott said the biggest change in the sector was in the number of online retailers.
"Online-only has grown from a handful of six in 2008 to over 200 now," he said.
Without the cost of a retail space or staff, online stores are able to provide big discounts, making it difficult for independents to match them.
With the local bottle shop finding itself caught between ferocious competition from big chain stores and a boom in online sales, some are becoming more specialist as a way to survive.
Simon Clarke, the manager of the independently owned wine store The Oak Barrel in Sydney's central business district, said the store had made a conscious choice to focus on customers ''wanting and demanding more choice''.
The store is packed with unusual and hard-to-find wines, beers and spirits, and has earned a loyal following because of the depth and breadth of its range.
"We consider ourselves educators as well as retailers,'' Mr Clarke said.
However Mr Clarke conceded the competition was challenging.
"Online selling is both an opportunity and a curse," he said.
"A number of wineries and suppliers undercut independent shops by selling their products considerably cheaper online."
Camperdown Cellars is another independent outlet. Owner Rip Viropoulos said chain stores were not able to react to customer trends as easily as independents could.
"Being a smaller independent retailer, we have the ability to effect change very quickly and keep up with all the latest trends," Mr Viropoulos said.
"We don't have all the red tape and paperwork to cut through before getting (new products) and small suppliers that don't produce enough to feed the chain stores are still able to look after our customers."
