The Big Box Debate
Around the world, there are numerous places to purchase your favorite bottle of wine. In cities across Europe, Australia and South America, local independent wine shops are the usual go to establishment. I cherish the many memorable experiences I have had in these shops, both big and small, during my travels around the globe. Inventory may vary from place to place, the size of the store often dictates the quantity and variety that is offered and most often, knowledgeable staff are on hand to make the perfect recommendation based on quality and price.
Yet here in the United States, this wholesome scenario is totally reversed. Except for the quality shops found in wine cultured cities such as New York, Chicago, and San Francisco, it is a completely different ballgame. The name of the game is “Big Box Rules”, with the two largest retailers of wine being Costco and Sam’s Club. Already deemed reality and not a wave of the future, these 2 giants dominate sales figures with nobody else in the industry coming nearly as close. Is this a good or a bad thing? Let’s take a look at the trending pro’s and con’s.
At present, Costco is the largest selling retailer of wine in the United States. According to sales figures for 2018, they sold nearly 4 billion dollars worth of alcohol. With wine accounting for half those sales, it resulted in being 20% of the company’s total revenue. With 750+ stores, some not selling wine or alcohol at all, the numbers are astounding. With 650+ stores, Sam’s Club was not too far behind.
Over last year’s 4th quarter, nearly 80% of Americans admitted to purchasing wine at one of the big box franchise. Statistics show that 20.6% in the age range of 18 -29, 31.2% ages 30 – 49 and 22.8% aged 50 – 64 patronized one of these stores for their wine buying needs. Just think if these sales figures were reversed? Local independent shops would be flourishing instead of struggling to stay alive in their community.
With the purchase of a membership to these large retailers, you are able to shop in bulk at heavily discounted pricing. Food, flowers, pharmacy prescriptions, jewelry, clothing and other household items are sold at prices few other stores, who sell the same products, can match. Here is the State of Michigan, no membership is required when it comes to shopping in these stores for the sale of any alcoholic products. Your entry cannot be denied based on beer, wine or alcohol sales. But you are limited to these items only, not any of their other discounted in-store products.
When it comes to the world of wine, the pricing mark up of 30 to 50% is industry standard. At the big boxers, they tend to work on a 13 to 15% ratio. At times, you may also find items priced at pennies over cost. You will notice most wines are marked at pricing ending in $0.99. For wines that are being reduced for quick sale, to reduce inventory, or for reasons of discontinuing or slow sales, you may spot the price ending in $0.79. Depending on the brand and or the final cost, these wines can be very desirable.
I remember years ago noticing a small amount of cases of Sanford Pinot Noir, which at the time I sold at our store for around $40 a bottle. I couldn’t believe my eyes when I saw that they were priced at $9.99. Happy to say, I bought every last case and was elated to have them as my house wine for the next few years. These type of deals are few and far between but in all honesty, they do exist. Being at the right store at the right time can definitely be an advantage to the right buyer.
At both Costco and Sam’s, they have their own private labels that are not for sale at any other retail location. Costco’s Kirkland wines have received many top scores from industry sources. Made by WX Brands, they sell different varietals from all over the globe at very reasonable prices. Sales figures are not available but judging by their appearance in customers shopping carts, they must be doing very well. On the other hand, Sam’s private label wines, called Members Mark, reviews and word of mouth have not been as kind. Referred by many as “box wine in a bottle”, the price may be tempting, but the quality could be questionable.
I for one am all for saving a few bucks, especially when it comes to my wine buying prowess. Though reduced prices and good discounts bode well for both establishments, there are drawbacks to their business model many people don’t care to realize. Their lure of low prices has hurt local independent wine shops for years. These shops, both big and small, are the backbone of many communities. Without them, the whole pyramid of “winery-distributor-retailer” would crumble, leaving the wine world as we know it going the way of the dodo bird.
Take for instance variety. The big box stores carry a very limited amount of inventory when it comes to wine. In their bins, they carry only the most well known varietals such as Cabernet Sauvignon, Chardonnay, Merlot, Sauvignon Blanc, Pinot Noir and a few others. Though you may see them on a very rare occasion, placements of Cabernet Franc, Viognier, Zinfandel, Syrah, Barbaresco, Amarone, Barolo, Pinotage, Grenache, Tannat, Petite Verdot and so many other wonderful wine varietals are nearly nonexistent. Though your choices are few, finding a decent bottle at a reasonable price is highly possible. On the other hand, their multiple value case stackings have a bit more variety to them but they tend to be everyday brands carried by most grocery stores and liquor shops. Prices are quite good, especially if you are on a budget, stocking up for a party or replenishing your cellar.
The biggest drawback I find to Costco and Sam’s is the lack of personalized service. The bottom line of discounts and reduced prices means you eliminate the expense of qualified sales staff. You, the consumer, are left to fend for yourself. There is no person on hand to make any kind of recommendations, help with any food and wine pairing, or show you the difference between one wine or the other. That is everything a good wine shop exhibits: hand sales, knowledge, recommendations, variety and service.
I can’t begin to tell you the number of times I have been perusing the wine aisle, checking out their selection and have been asked if I could help make a selection. The wine geek in you always takes over and am more than happy to help put the right bottle into their hands. It’s those times your knowledge is thanked only by the wine gods themselves.
That is the one advantage of supporting a fine wine retailer. The availability of not only a few brands of Cabernet or Chardonnay, but a large selection to choose from, and with someone there to explain the difference between them. Plus so many other grape varietals, different size bottlings, hundreds if not thousands of wines to choose from, all in the price range everyone can afford. If you happen to find a wine that is available at their shop, which may also be on display at one of the big box boys, it wouldn’t hurt to ask if they could come close to or even match the price. You might be surprised. In the long run, it may save you a few bucks in gas and even more so with your valuable time. And best of all, no membership required.
As a wine purist, I love roaming wine aisles, looking at all the different brands from around the world, the colorful labels, the unique wine grape varietals, remembering tasting the familiar and exploring the hard to find rarities. Like shopping for music, clothing or specialized food, the hours spent are well worth your time invested. It all boils down to 3 important factors: price, variety and service. The convenience of a big box store is just that: quick, easy, inexpensive, in and out. It’s a good thing, if you find what you are looking for. As far as price, they can’t be beat. But if you are looking for selection and service, seek and you shall be rewarded. Bottom line, it’s all good.