I have been looking into the possibility of opening a 'neighborhood' wine
shop that would also offer tasting and some appropriate 'gourmet' food items
for sale (more to the format, but that's the core of it). Where I live
(surburban Orange County, California) and, I would presume, in most parts of
the US, the retail wine market is dominated by the 'big box' retailers, food
markets, and a smaller number of local 'warehouse' retailers. I do not see
more than a very small number of smaller shops around and am not naive
enough to think that few people have had the same idea....... so I've been
doing a lot of research.

I've contacted a few people in the wholesale end of the business and their
concern is that the 'wine people' shop at the warehouse stores that stock
1,000 + wines and that everyone else just doesn't care enough to venture
much beyond their shopping baskets at CostCo or the local food market.....
or is having their needs met by those stores.

But wine interest is clearly growing exponentially and the right combination
of service, value and content would seem to have potential.

I would really appreciate any and all opinions on this, and especially
thoughts on the most relevant demographics to consider in selecting a
potential location. I have my own ideas on all of this, but would
appreciate as much input as possible. A Google Groups search shows a couple
of threads a year or more ago, but nothing more recent.

Midlife wrote:

> I've contacted a few people in the wholesale end of the business and their
> concern is that the 'wine people' shop at the warehouse stores that stock
> 1,000 + wines and that everyone else just doesn't care enough to venture
> much beyond their shopping baskets at CostCo or the local food market.....
> or is having their needs met by those stores.
>
> But wine interest is clearly growing exponentially and the right combination
> of service, value and content would seem to have potential.
>
> I would really appreciate any and all opinions on this, and especially
> thoughts on the most relevant demographics to consider in selecting a
> potential location. I have my own ideas on all of this, but would
> appreciate as much input as possible. A Google Groups search shows a couple
> of threads a year or more ago, but nothing more recent.

The rise of the "wine warehouse" is a relatively recent phenomenon, the
"neighborhood" shop having been the de facto standard IMO. The success of the
big stores I would suspect stems from an economy of scale: they buy wines from
distributors in such quantity that they negociate lower wholesale costs than
the small guy can. However, in both Manhattan and Berkeley the neighborhood
model lives on. Why? In both places, you have what is now ra pedestrian
traffic. Additionally, the most successful neighborhood stores offer two
things that the warehouses do not: insightful (and personalized) advice and a
selection of smaller -- often artisanal and price-conscious -- wineries whose
production is too small to be of interest to the big guys. To select a
location, I'd look for somewhere that gets a fair amount of traffic, that is
also near to big and reasonably affluent residential areas and is as far as
possible from the nearest BevMo, Trader Joe's or Costco ;-)

Mark Lipton

On Sun, 23 May 2004 23:00:13 GMT, Mark Lipton > took
the time to tell us :

>
>
>Midlife wrote:
>
>> I've contacted a few people in the wholesale end of the business and their
>> concern is that the 'wine people' shop at the warehouse stores that stock
>> 1,000 + wines and that everyone else just doesn't care enough to venture
>> much beyond their shopping baskets at CostCo or the local food market.....
>> or is having their needs met by those stores.
>>
>> But wine interest is clearly growing exponentially and the right combination
>> of service, value and content would seem to have potential.
>>
>> I would really appreciate any and all opinions on this, and especially
>> thoughts on the most relevant demographics to consider in selecting a
>> potential location. I have my own ideas on all of this, but would
>> appreciate as much input as possible. A Google Groups search shows a couple
>> of threads a year or more ago, but nothing more recent.
>
>The rise of the "wine warehouse" is a relatively recent phenomenon, the
>"neighborhood" shop having been the de facto standard IMO. The success of the
>big stores I would suspect stems from an economy of scale: they buy wines from
>distributors in such quantity that they negociate lower wholesale costs than
>the small guy can. However, in both Manhattan and Berkeley the neighborhood
>model lives on. Why? In both places, you have what is now ra pedestrian
>traffic. Additionally, the most successful neighborhood stores offer two
>things that the warehouses do not: insightful (and personalized) advice and a
>selection of smaller -- often artisanal and price-conscious -- wineries whose
>production is too small to be of interest to the big guys. To select a
>location, I'd look for somewhere that gets a fair amount of traffic, that is
>also near to big and reasonably affluent residential areas and is as far as
>possible from the nearest BevMo, Trader Joe's or Costco ;-)
>
>Mark Lipton
>
Mark, your points seem to me to be right on the mark. Don't know
whether retail strategies from 'Down Under' will assist the OP, but we
too are having a 'slug fest' with the major distributors, but cannot
help think that the dedication required to be a stand alone
independent wine reseller is universal.

I get sick and tired of hearing the bleating from fellow independents
about the econmomic advantages enjoyed by the chains/franchises of the
Big 4. Rather than play that game, I found a very upwardly mobile
area to ply my trade, continued attending everry possible trade show,
and PROUDLY stock wines from a myriad of independent winemakers,
(admittedly blended with some well knowns, to appease the minority
in my area who have an adventuresome streak as wide as a nail
clipping). Results were not immediate, but 5 years down the track,
when turnover is 3 fold, and I can enjoy the accolades of recommending
wines, when buyers return to laud praise on the wine selections I made
for their function/party / etc etc. Apart from a self indulgent rant,
my only advice to the OP is simple....... decide your startegy BEFORE
you buy, and go for it. Back your judgement, kill the customers with
service, and don't necessarily entertain comparitive pricing is the
pre-eminent factor in wine buying... they LOVE being given advice, if
done sans snobbery, and with the attitude "their" night is imporatnt
to you too. Otherwise....buy a franchise...... :>)

Regards Swooper

The warehouse stores are great if you are wanting to purchase bulk for a
party, and don't need advice on what you are buying. Looking through the
selections at Costco, Sams, World Market, etc. I find the same generic stuff
98% of the time.

Local wine shops offer personalized service from (hopefully) knowledgeable
staff, tastings, accessories, broader selection both horizontally and
vertically (more regions and more years) than the warehouse concept. In
addition, most local wine shops store the merchandise in better conditions
(think about the average tempareture in Costco or Sams).

You may also consider expanding outside of wine to include fortified wine
(port, sherry, etc.) and possibly top-shelf liquor such as Single Malt
depending on local liquor laws and licensing. For instance, in AL you can't
have tastings if you also sell liquor. However, the convenience factor of
being able to get all of my alcoholic beverages in one place is a good
draw.... so long as it doesn't become just another package store.

All in all, local wine shops are thriving and will continue to do so for a
long time. Personally, from a retailer perspective, I would want to be in a
decent shopping center where there is enough draw to get people in and
visibility to major highways. A clean, well laid out store format and
friendly, knowledgable staff are critical. Don't be afraid to be near a
warehouse store either. Sure, they will always beat you on volume price,
but they will never win on customer service... and that's what keeps my
business.

Cheers,
Gary

In Alabama some Ports cannot be purchased in Wine Shops due to Alcohol
content being to high.
"CabFan" > wrote in message
. ..
> The warehouse stores are great if you are wanting to purchase bulk for a
> party, and don't need advice on what you are buying. Looking through the
> selections at Costco, Sams, World Market, etc. I find the same generic
stuff
> 98% of the time.
>
> Local wine shops offer personalized service from (hopefully) knowledgeable
> staff, tastings, accessories, broader selection both horizontally and
> vertically (more regions and more years) than the warehouse concept. In
> addition, most local wine shops store the merchandise in better conditions
> (think about the average tempareture in Costco or Sams).
>
> You may also consider expanding outside of wine to include fortified wine
> (port, sherry, etc.) and possibly top-shelf liquor such as Single Malt
> depending on local liquor laws and licensing. For instance, in AL you
can't
> have tastings if you also sell liquor. However, the convenience factor of
> being able to get all of my alcoholic beverages in one place is a good
> draw.... so long as it doesn't become just another package store.
>
> All in all, local wine shops are thriving and will continue to do so for a
> long time. Personally, from a retailer perspective, I would want to be in
a
> decent shopping center where there is enough draw to get people in and
> visibility to major highways. A clean, well laid out store format and
> friendly, knowledgable staff are critical. Don't be afraid to be near a
> warehouse store either. Sure, they will always beat you on volume price,
> but they will never win on customer service... and that's what keeps my
> business.
>
> Cheers,
> Gary

Actually, it's a licensing issue --- a wine shop can sell Port and other
fortified wine if they choose to purchase a license to do so.

The reason most don't is that the state ABC controls the distribution of
Port in AL and their selection is the absolute pits. There were some rumors
that they were getting out of the business and turning it over to private
distributors, but what they have instead decided is that it would be better
to reduce their already weak selection since they don't seem to sell very
much of it.

On Sun, 23 May 2004 23:00:13 GMT, Mark Lipton > wrote:
>Midlife wrote:
>
>> I would really appreciate any and all opinions on this, and especially
>> thoughts on the most relevant demographics to consider in selecting a
>> potential location. I have my own ideas on all of this, but would
>
>the small guy can. However, in both Manhattan and Berkeley the neighborhood
>model lives on. Why? In both places, you have what is now ra pedestrian
>traffic. Additionally, the most successful neighborhood stores offer two
>things that the warehouses do not: insightful (and personalized) advice and a

Agreed, this is the same way in San Francisco. There are numerous small
wine places, and there are also a number of wine 'warehouses' that seem
small (like the Wine Club) but have a pretty good revolving selection of
wine.

For an example, if you can make it to SF, I'd take a look at the
Plumpjack store in Noe Valley. It's a small store, with great service
and a great selection. Although the PJ wine is in the window, they
never tried to push it and all their wine was priced reasonably, I
thought.
They were great at recommending wine, which is why I went back a number
of times.

good luck,
K

"CabFan" > wrote in message
. ..
<snip>
> visibility to major highways. A clean, well laid out store format and
> friendly, knowledgable staff are critical. Don't be afraid to be near a
<snip>
Just a few notes from someone who shops at all levels of the wine selling
frenzy. When I want good wine, I pay for the advice accompanying it, when I
want drinking wine, I buy cheap.

The underscore in the excerpt is "friendly, knowledgeable staff". You might
know everything, and you might be incredibly personable, but you will not be
there all the time. Your only advantage over the warehouse type place is
your staff, and then your different selection of products. If people believe
that they can ask absolutely anything, then you will sell wine. Run tastings
for your staff, introducing new lines. They must also be interested in wine
itself, not just selling it.

You will of course have people who are shopping for a big event, come in,
pick your brains, and then go to the warehouse to buy what you've
recommended. Let them. Bend over backwards to give them useful information,
even ring the warehouse for them (you might win off the guilt trip!). The
customers you keep will remember this. The customers you won't keep were
lost to you anyway.

Cheers,

Andrew

Kevin > wrote in message news:
> >> I would really appreciate any and all opinions on this, and especially
> >> thoughts on the most relevant demographics to consider in selecting a
> >> potential location. I have my own ideas on all of this, but would
> >

Another place to check out, which is much closer to Orange County, is
the new Silverlake Wine Company (in Silverlake, AKA Los Angeles) It's
run by a couple of sommeliers and their approach to the concept is
great. Obviously I would not advocate copying them, but it's always
good to see something that works in action.
E.