MOVE FORWARD OR DIE TRYING NOT TO
Wednesday, April 14, 2010 at 04:38PM 
In what is becoming as perennial an occurrence as spring’s shad run, Albany toys with passing legislation that would permit grocery stores to sell wine. I suspect, though I haven’t bothered to check, that similar movements take place in state legislatures other than New York’s, too.
At first blush, you’d probably think that such august bodies might be focusing on more important matters. Or, perhaps, you just think, so what? Well, as all of us living in the post-Watergate era should know, anytime our legislators legislate, and perhaps particularly when they threaten to legislate, there must be something going on.
In the case of to permit (or to continue to not permit) grocers to add wine bottles to their wares, there’s a lot more at stake than whether you might, if you live in New York, be able to drop a bottle of white and a bottle of red in your basket along with the dog food and toilet paper.
Most of the overt caring about this is being done by the most directly affected groups (not to mention their lobbyists). On the one side are the grocery stores. They range in size from the bodega down on the corner to the supersize ones, such as Whole Foods. They want to sell wine (they already sell beer) because wine is a much higher margin product than, for example, frozen peas.
On the other side are the wine retailers (who, by the way, in New York, aren’t allowed to sell beer; try and figure out the logic behind that segregationist policy). They, too, range in size from the mom & pop (also down on the corner) to the titans of the industry, like Morrell, Zachy’s and suburban big box outfits.
Obviously, they don’t want the added competition. Who would? The big grocery stores have big-time buying power, and while theoretically – actually, I mean by law – everyone gets the same price from the distributor (we call ourselves wholesalers in New York State), size does matter, and there are lots of ways that the bigger the buy, the better the buy is for the buyer. Which, of course, translates into higher and higher margins. Which, of course, means more profit.
I suspect that at their very heart of hearts, the big wine stores don’t much fear Whole Foods. After all, they, too, have buying power, not to mention a well-established expertise trafficking in the stuff.
This battle is really about the medium and little guys.
The hue and cry is that the minute the grocers can hawk wine, the neighborhood wine store will have to close because it simply won’t be able to compete on price. I think that this is both true and very much not true. And it also might be the best possible thing that could happen to the local wine store for consumers.
Actually, it’s far more not true than true for two reasons. First, they all can in fact get along. There’s plenty of business to go around. I know this is so because before moving to New York City, I lived in South Florida (I still shudder when I say that) for many years. Down there are the same types of wine stores we have up here. There are little ones, bigger ones, giant ones, hip ones, stodgy ones, good ones, mediocre ones, and on and on.
About 10 years ago, supermarkets decided to get into wine in a big way. Publix, a place where shopping is truly a pleasure (and one of the few things I actually miss about my Miami wilderness years), spent millions retrofitting entire aisles with wine and wine displays. But for the overhead fluorescent lights, you’d think you were in a proper wine store. Publix had it all. From Krug and Latour (really) to Yellow Tail and K-J, and just about everything in between.
Prices were, naturally, pretty good, too. Certainly cheaper than the mom & pop down the street. Or in many cases, the mom & pop in the same strip mall. What Publix didn’t offer with all that wine at all those good prices was a lot of help for the bewildered consumer pushing his/her cart down that multi-labeled aisle. I often took it upon myself to offer up my two cents if I happened to be standing next to a particularly desperate-looking soul.
I’m sure some smaller wine stores closed, though some no doubt would have regardless because, well, businesses close all the time. I can’t recall a single instance where one of the big wine stores, such as Crown or Sunset, had to shutter because of competition from Publix and Winn-Dixie.
You might see where this is headed.
Mom & pops, don’t try and sell your customers Yellow Tail. You won’t be able to compete on price with Whole Foods. By a long shot. If that type of wine is your bread and butter, you’re in very big trouble.
On the other hand, if you’re one of those wine stores that actually features lesser-known producers to begin with, you’ll be more than fine. Gristedes isn’t going to be looking to hand sell bottles of Finger Lakes Riesling.
Mom & pop will need to offer something that the big boxes can’t. Everyone-knows-your-name service is the way forward. Consumers like wine. There’s more well-made wine available now than at any time in history. But the vast majority of consumers can’t or won’t be bothered to sort their Fumé from their Fuissé.
Whole Foods won’t have enough “experts” running around to do this. Mom & pop do. Or should. Just as importantly, mom & pop need to order something other than Moët and Clicquot to sell.
If they don’t, they’ll be gone. And they’ll have no one to blame but themselves.
Reader Comments (2)
In The Netherlands the larger supermarket chain-stores sell beer and wine, even some harder liquor. Nonetheless, local wine and liquor stores seem to do well enough. Though sometimes stores like Aldi (where you have to get your items out of half opened cardboard boxes yourself to save money on personnel) have an exceptional selection of wines for less and there will be a run for it. Eventually, if you sell quality for a good price, people will come anyway. They want to feel like they've put in some effort to find the right wine for the right occasion or food, not just a 'grab' from a shelf'.
One wine store recently added (fair trade) coffee and tea, glass ware and chocolates to their merchandise.
Well said. If you build it, they will come. Or perhaps, if you only stock it with interesting stuff (at all price points), they won't have much choice other than to buy interesting stuff.
The Netherlands' model is similar to the U.K.'s. Marks & Spencer is really no different than the supermarkets in Florida I wrote about (except, of course, Marks & Sparks, as it's affectionately called, has underwear on offer, too). Both have fairly large selections, but most of the wines on the shelves are there because of the price point, not the "interesting point."
Mom & pop's problem is that mom & pop are often lazy. The reason mom & pop will disappear is not strictly because of Whole Foods. It will be because mom & pop decided to open a liquor store instead of, for example, a hardware store. Most of the mom & pops I've come across, both in the big city and in South Florida, simply don't care much about wine. They're just trying to sell brands that sell themselves, such as Yellow Tail, Clicquot, etc. There's nothing wrong with that, of course, until it no longer works. That day will come, which is sad, but ultimately it will be better for consumers.