A friend of mine recently posted on her facebook page that she wished wine were sold in grocery stores in Memphis. She had no idea the can of worms she opened. She received a gambit of responses from her facebook friends, some strongly agreeing with her, some adamantly disagreeing with her, each for a variety of reasons.
This harmless wall post got me thinking about convenience and how ultimately that’s what led to the creation of fast food. Do we really need everything to be faster, easier and cheaper?
I asked my friend, Michael Hughes, General Manager of Joe’s Liquor Store, to weigh in about the wine in grocery store issue. He not only educated me on the topic but summed it up perfectly as well. Read below and feel free to express your views.
Cheers!
Margot
From Michael:
“It’s difficult to separate my viewpoints from that of a consumer/wine lover and that of someone who is in the retail wine biz. So I won’t try to do that.
The way I see it changing legislation to allow wine sales in grocery stores will bring about an incredible convenience to consumers. But along with that comes so many unseen costs that the consumer has no idea about.
The incredibly well-financed group behind the “Red, White & Food” propaganda would have us believe that our current laws are backward, anti-consumer, inconvenient and anti-business. Would anyone call New York backward? They don’t allow grocery store wine sales. This group would have us believe that there will be an overwhelming amount of tax revenue due to the increased sales of wine. How can that be possible when there is only a finite amount of alcohol drinkers in the state? Drinking will not increase so therefore how can tax revenue increase? The way I see it they are being very misleading when it comes to the supposed financial windfall.
Many supporters of this bill say that other states allow grocery store wine sales and they still have thriving independent wine stores. That is true but those states have allowed grocery store wine sales for decades. Enacting this law will cause the closure of many independent shops across the state. That is a simple fact. With an inability to compete with big box pricing a multitude of small business will close. Does it really make sense to cause more job loss in this or any other economy?
I’m sure that big box retailers will only focus on the big sellers and not the unique, expressive wines from small family growers. The reason being that they can’t make money off of those wines because they don’t sell at the rate of the “Top 100.”
The money spent in the big box grocery stores goes to their headquarters. Money spent in the locally-owned independent wine and liquor retail stores stays here. That profit gets put back into the local economy. Locally owned wholesalers here in Tennessee will be either gobbled up by the multi-state wine wholesalers or they’ll be forced out of business.
Being a wine retailer I have had the pleasure of helping my customers explore their own interest in wine. One of the main reasons I’ve been able to do that is because I’ve developed relationships with these locally owned wholesalers. They’ve been more than willing to bring wines into the Memphis market for me to provide to my customers. Those customers appreciate the extra step you take for them and they appreciate having access to new and delicious wines. I don’t anticipate the same working relationships to be developed with large conglomerates. These companies see dollar signs not customers. Wine is simply a product to sell not something they are passionate about and I can’t stand to see that.
Wine to me is something I drink, read about, explore, pair with food, travel to learn about and pretty much obsess over. I’d hate to see it be treated like a box of cereal”.
Check out Michael’s blog at: www.midtownstomp.blogspot.com
Sorry, but this is just wrong. There should be changes in regulations to allow liquor store owners to sell beer and snacks and other items for a party, and there should be adjustments to regulations for the number of feet that store has to be built away from a school or church.
Liquor store owners often register other stores they own in the names of relatives or friends to avoid the single-store ownership laws, so I’m just not buying this, not for a second.
NO grocery store will ever compete with Buster’s or Arthur’s or Kimbrough for high-quality wine, so very few “small businesses” will perish if this happens.
The status quo is NOT acceptable, and, no, I do not work for a grocery store, or PR firm representing grocery stores; I’m just a consumer of wine who thinks it ridiculous that I can buy a bottle of wine in a convenience store in Trumann, AR, but not Memphis, TN.
I have mixed feelings about this. If indeed there is a loyal customer base at the classier places like Kimbrough then cheap wine at the grocery store should not be an issue. At the same time I think that the convenience factor of having it at the grocery store would make our family less likely to go the small store.
It’s too bad that all the other Mom and Pop stores that were cannibalized by big box stores didn’t have the same strong coalition (a.k.a. deep pockets) that the alcohol industry has. How many stores folded without much of voice or protest from Walmart replacing them ? Liquor stores have been fortunate to have been protected as long as they have.
@Steven-I’m sorry you feel this way. Clearly we see things differently. Retail wine shops are not in the business of being convenience stores i.e. selling chips etc. We are in the business of selling wine & liquor. Furthermore, if other store owners are buying wine shops & putting them in the names of relatives that is news to me. Grocery stores will stock the top selling wines & most inexpensive wines. Their ability to buy containers as opposed to only cases or single bottles will give them the ability to set pricing. Independent stores cannot compete with that pricing. That is fact not speculation. Yes I do agree that some stores will continue on & will fair well during this change if it were to happen. However, you are kidding yourself if you don’t think that many stores will close. You are also missing the point that even though some stores will survive many of their employees will not. If business is down these stores will have to lay off in order to keep cost down. And don’t just think that these laid off employees will be able to go get jobs at Kroger etc because they will not be investing money to bring on employees just for the wine section. They will treat it like any other product. If you really want to affect change start a lobby group to lower the astronomical liquor/wine taxes in TN. That would be a change that I truly believe would be beneficial to the consumer.
@Aaron-It is too bad that “all the other Mom and Pop stores that were cannibalized by big box stores didn’t have the same strong coalition”. Didn’t we learn from our mistakes? Should we allow more independent businesses to close just because others have? That makes no sense to me. Also, if you think we are “protected” you really have no idea what this business is like.
From John Lawrence:
Is there any research into customer service in the wine-section of supermarkets?
I have to say that I am often a speed and convenience guy… hate to wait a second at the drive-through and think I would like to be able to pick up wine at the grocery store. In Florida and a few other places, I have done so but was disappointed.
I LOVE liqour stores. Partly because of the selection. A lot because of the expert advice. Mainly because they are neat.
Neat like a butcher or a farmers market. People say hello and welcome and ask what I’m needing and why I’m needing it in almost every liqour store I have ever been in. No matter location or size or thickness of glass, I get the impression that the owner is never far away.
I am torn on this issue. I know different things are important to different people but… I’d like to think the legislature could slide this one to the back burner until they have tackled a few other more pressing things?
Michael: You are correct. I am naive to the inner workings of the business. I just meant protected in the sense that grocery stores are not competing with small stores yet. My bad.
It seems to me that the issue comes down to there being two kinds of wine-drinkers. I’m painting with a broad brush here, but I have some knowledge whereof I speak:
1. There are the aficionados. I don’t mean people who act like the snobs in “New Yorker” cartoons, but rather people who enjoy wine for the aesthetic experience and would rather spend $20 on a good bottle of interesting wine than $8 on a white zinfandel. These people will shop at Joe’s or another shop that has knowledgeable staff, even if wine is available in grocery stores too.
2. There are the people for whom quality is a lesser issue than cost. They may be college students looking to get loaded, someone who wants to relax with a glass in the hot tub, etc. These are more likely to buy that $8 white zin, and they’ll be happy to buy it at the grocery store if it’s available there.
The problem seems to be that while the Group 1 people are the best argument for locally owned, independent liquor stores to exist, their business alone isn’t enough to keep the independent stores afloat. (I worked in a liquor store in another state years ago, and that was definitely the situation there.)
So the independent stores need the income from the Group 2 buyers to stay in business. But if wine is available in Schnuck’s, the Group 2 buyers will buy it there instead. As Aaron correctly points out, the independent stores are effectively subsidized by laws that keep big grocery chains from competing in the wine market.
These laws are a blatant impediment to a free market, and yet the upshot of them is that they create a situation in which EVERYONE can get what they want; the only downside is that some folks have to make an extra stop on the way home.
Free capitalism is great when it works, but I’ve lately come to see that in markets involving quality-judgments (such as wine), it favors lower quality and bland mass-appeal. In this case, I’m all for keeping the laws as they are now.
(I’m not a representative of any party in this fight. Though I did buy a bottle of wine at Joe’s about an hour ago.)
In at least 2 of the states that allow grocery stores to sell wine (California and Oregon), there’s one key marketing factor that the wine shops in those states have—they are allowed to give tastes of the wine. The groceries are either not allowed to do tastings or choose not to. (I am not claiming to know all the laws.) Tennessee does not allow wine shops to give tastes or have tasting events in the wine shop.
In Oregon, I was a regular at the Thursday night wine tasting at my neighborhood wine shop. $10 to taste 8 wines and I almost always went home with a bottle or two. I never would have bought that much wine without first tasting it. Did I ever buy wine at the grocery store? Sure, once in a while (when I needed wine to cook with), but I always had a great wine selection from the wine shop so it was rarely necessary. The wine shop didn’t sell box wine or yellow tail, and the grocery stores didn’t sell the cool, local indie wines or anything particularly special. It was self-differentiating by the product selection.
In my opinion, Memphis wine shops are already hobbled because their greatest marketing tool–tasting–is being denied to them. If more tax revenue is the goal, then allow wine shops all the tools that other states allow to market wine. They will sell more wine. And if grocery stores are allowed to sell wine, wine shop tastings give the wine shops a tool that the groceries don’t have.
I get to try on clothes before I buy them. I can get a sample of paint before I commit to covering a wall with a particular color. I get to test drive a car before I buy it. I even get to see, smell and sometimes taste food in a restaurant before I order. Why in the world do we expect people to buy wine without tasting it?
I don’t think the argument that other states allow grocery stores to sell wine and it all works out is valid if we’re not looking at the other rules and restrictions that are, or are not, in place. Sure, wine shops make it in other states even with grocery sales, but there are other factors helping that work which aren’t applicable here…yet.