Tennessee: Liquor store owner fights wine battle using his prices

Source: wbir.com
July 22, 2016

Liquor stores in Tennessee have battled to keep customers since grocery stores began selling wine July 1.

One Knoxville liquor store owner says the initial rush to buy wine at other stores took a bite out of his sales. Bob’s Liquor and Wine owner Bob Gilbertson said he’s consistently beating their prices and has the receipts to prove it.

“It’s around 25 or 30 percent that we’ve lost in dollar sales,” Gilbertson said. “We have more selection and better prices. The grocery stores don’t buy many cases at a time. We buy a lot of cases at a time, so we get a volume discount.”

The proprietor put his theory to the test when the new law took effect – buying a mixed case at area grocery stores and putting the results on display for his customers.

“I decided to see what we were up against exactly, so I took a market basket of four category leaders, and we were quite a bit cheaper than Kroger or Food City – by a significant amount,” Gilbertson said.

We decided to put his numbers to the test, buying three of the bottles he bought and comparing prices at area grocery stores.

At Kroger in Bearden, Josh Cellars Cabernet Sauvignon is $18.99 or $15.99 with a Kroger card. Kendall Jackson Vintner’s Reserve Chardonnay is $25.99, on sale for 16.99. A bottle of Meoimi Pinot Noir is listed at $28.99, on sale for $19.99.

Food City was up next. A bottle of Kendall Jackson there was $14.99; Josh Cellars listed at $16.99, sale price $15.99; and Meoimi was on sale at $19.99.

Right across the street from Bob’s is Trader Joe’s, where that same bottle of Kendall Jackson runs $20.99, Meomi also $20.99, and the Josh Cellars was $15.99.

The prices may be different, but that hasn’t slowed business for grocery stores getting into the wine business.

“At Food City we’re extremely pleased with the wine sales we’ve seen over the first three weeks of business,” said Food City President Steve Smith.

Smith says convenience, variety and pricing have all been reasons wine sales have been strong for the grocery chain. He says new options make for a better market for consumers.

“They’ve seen prices drop not only by grocery stores being in the business, but I think having wine in the grocery stores have brought prices in the liquor store down,” said Smith.

In a statement to 10 News Kroger spokesperson Melissa Eads explains: “Wine has been one of the most requested items in our stores for years. Sales have been strong, and customer feedback has been very positive. We will continue to work to bring our customers a great wine selection, at a competitive price.”

Trader Joe’s representatives declined to comment on this story.

Liquor store owners like Gilbertson hope shoppers exercise their freedom to compare prices and come back to his store.

“It has come back a little and hopefully it’ll continue to come back a little at a time,” said Gilbertson.

Many more stores, including convenience stores, are expecting to add wine in the coming months.