Supermarkets Invite Shoppers to Drink While They Shop

Source: WSJ

Alina Dizik

July 12, 2016

When Jo Murray strolls the aisles of her local Gelson’s supermarket, she is already one cocktail in. Before tackling her often-extensive grocery list, she orders a Tiffany Breeze, a Prosecco-and-strawberry-lemonade concoction that Gelson’s sells for $9 at the wine bar it operates just inside the front door.

Ms. Murray, a 58-year-old retired Boeing executive in Long Beach, Calif., often meets her husband, David, at the supermarket on his way home from work. Their twice-a-week happy-hour shopping ritual often includes a little time relaxing in the bar, where they bounce dinner ideas around with their favorite bartender, Ray. Usually, they order drinks and nibble on a fresh mozzarella Caprese salad along with a lobster roll, a $26 tab. “It’s the ‘Cheers’ of grocery,” she says.

Some high-end supermarkets are serving alcohol. Many have set aside space for wine bars and beer gardens where they host tasting events, with drinks and appetizers. Some stores encourage shoppers to “sip ‘n’ shop,” drinking while pushing a shopping cart for a more relaxed shopping experience.

It is the latest step in efforts by supermarkets, a famously low-margin business, to make more money by keeping shoppers in their stores longer and getting them to spend more while they are there. Grocers also have been turning themselves more into restaurants, adding extensive prepared-food counters, full-service catering and bustling seating areas where shoppers can grab a quick meal.

Several different bar concepts have opened at Whole Foods WFM -0.68 % stores in the past two years, says Chris Kopperud, a Midwest regional specialty coordinator with Whole Foods Market Inc. To encourage bar patrons to socialize, stores are offering beer hall-style communal seating at tables near the front entrance as well as intimate wine bars tucked in the back of the store near the wine section, he says.

At nearly 350 Whole Foods locations nationwide, shoppers can carry open beverages out of the bar area and around the store as they shop around. Some stores have added cup holders to their shopping carts or placed racks around the store where shoppers can place empty stemless wine glasses. In some Texas locations, the $1 cans of beer rest in ice-filled buckets labeled “walkin’ around beer.” “When customers find out that they can sip and shop, a lot of times it’s a lightbulb moment,” Mr. Kopperud says.

To meet demand, Gelson’s stores have allocated more space to wine bars, says chief executive Rob McDougall. The 25-store chain opened its first bar in 2014 in hopes of drawing men into stores. The retailer imagined they would be accompanying their wives.

“We projected that it would be mostly one spouse sitting there while the other spouse shops,” Mr. McDougall says. Instead, Gelson’s found the bar was a hit “across ages and across genders.” The company plans to add another six bars next year.

Shoppers are welcome to eat food purchased from anywhere within the store; prices tend to be lower than those at nearby bars because the stores don’t need margins as high as those at bars to be profitable. “I can open up that bottle of wine at half the price of a restaurant,” Mr. McDougall says. Gelson’s doesn’t offer the typical happy hour specials or accept tips for bartenders, he adds.

The format isn’t for everyone. Carolyn Sasse, a 36-year-old drug researcher, visited the wine bar and cafe at the one-year-old Mariano’s supermarket near her workplace in June and was annoyed by the constant interruptions as she chatted with a co-worker. Even though Ms. Sasse and her friend were seated in a quiet spot near a glass atrium in the Glenview, Ill., store, she found intercom announcements and the constant stream of passing shoppers were a distraction. But she says she couldn’t beat the convenience of socializing in a place so close to work. “They do leave you alone and the wine isn’t that bad,” Ms. Sasse says.

“We appreciate customer feedback on our store offerings, and we will continue to review as we continue to fine-tune our offerings,” a spokeswoman for Mariano’s, which is owned by Kroger Co. KR -0.40 % , said in an email.

As sales in traditional full-service restaurants have dropped, spending on prepared food and drink at grocery stores has grown. In the period from 2008 to 2015, traditional-service restaurants experienced a $615 million drop in sales; during the same period, food service at supermarkets grew by almost $471 million, to a total of almost $10 billion, according to market-research firm NPD. Shoppers perceive drinks at supermarkets to be a better value than drinks in a traditional bar or club, says Bonnie Riggs, a restaurant-industry analyst for NPD. Tipping is usually discouraged.

Bars stretch out the time shoppers, especially 20-somethings, spend in the store. That helps new shoppers get to know the store, even if they had planned to make just a quick stop. “Nobody walks out of the supermarket with just one item,” says James Sweeney, managing director at the Stores Consulting Group in Wilmington, Ohio.

Market District, a 13-store chain owned by Pittsburgh-based Giant Eagle Inc., launched its first supermarket in 2006 and its first supermarket bar in 2013. Friday night wine-and-food gatherings in several Ohio stores now draw from 300 to 600 shoppers. They move between stations positioned around the store, and a majority will buy groceries and take them home.

“It was more of a marketing brainchild six years ago that has evolved into its own social experience,” says Brian Ferrier, a regional vice president for Giant Eagle.

Many supermarket bars are themselves getting bigger. Bars at Market District’s newer locations offer more seating and 16-handle beer pubs along with a rotating list of wines, Mr. Ferrier says. Prepared foods are offered in both the cafe and bar areas.