Tuesday, November 28, 2006

The Future of Wine Sales

In this month’s Atlantic Monthly, there is an article on wine shops and the competition they face from chain stores, grocery stores and changing alcohol laws.

This past election, several states voted on measures that would allow beer and wine to be sold at grocery stores, convenience stores, etc. Not surprisingly, package stores and wine shops were opposed, and large retailers like Wal-Mart and Costco were rather enthusiastic supporters.

Here in South Carolina, beer and wine are available at grocery stores, big-box stores, gas stations and small wine shops/package stores, as well as large, beverage specialty stores like Green’s and Total Wine.

This makes for lots of price competition and a consumer-friendly environment if you drink wine or beer. However, it’s hard for small wine shops to stay competitive. I wrote recently about some new franchise wine shops that have opened in town. I wonder how they’ll fare in a saturated marketplace.

This statement from the article really caught my attention:

Unfettered alcohol sales in supermarkets and big-box stores would almost certainly lead to a great narrowing of the kinds of wines on offer—as happened long ago in southern states that deregulated wine sales.

I’m not sure I agree with this. Having lived in both North Carolina and South Carolina, I can say I enjoyed great wine shopping options in both places. As long as there are consumers who demand selection there will be retailers to fill the need.

Of course, the marketplace here is nothing like NYC, D.C. or San Francisco, but compared to other U.S. cities of a similar size, places like Raleigh and Columbia measure up pretty well.

While I’m a big supporter of privately-owned wine shops, they face the same dilemma as small bookstores. Increasing competition from the Internet and large retailers will force them to adapt or perish.

I love quirky shops packed to the gills with wine and run by enthusiastic, knowledgeable, wine people. I’ve always dreamt about having a place like that that myself one day. But I wonder what the future holds for such places.

Any thoughts?

Speaking of retail, I always enjoy reading the Wine Chicks commentary on the world of retail wine sales. I can't say I'll be missing that world this holiday season. I'm content to be a consumer.


farley said...

I think your assessment is correct in that as long as there's demand, someone will fill it. It seems that grocery stores often focus on more readily available wines (often cheaper but not always) and serve a matter of convenience. Small wine shops that you and I love provide the real experience, and I think they will succeed because of that. I'm from MS and have several friends who own liquor stores back home (can't buy in supermarkets there anyway). Therefore, I hope so for their sakes. And to keep finding those hidden gems.

John said...

I agree. I like the convenience of deregulated sales, but I don't ever want to lose the independent shops.