Strictly Business: Race is on for liquor sales
Sunday, June 10, 2012
Can we all agree that a few front-runners streaked out of the starting gate just as liquor sales went private across the state on June 1?
Based on a full day out in Vancouver talking to liquor sellers and customers, my bet is that Costco Wholesale Corp. will win the lion's share of Clark County's liquor sales, followed by Fred Meyer and Safeway. But please, let me know how your thoughts compare.
As an aside, my sympathies to those who assumed that privately sold liquor would be cheaper than booze distributed by the government. I know it was a real bummer for some who found out the price of their bottle — plus tax — was higher by between 10 percent and 30 percent at the grocery store, compared with what state liquor stores charged the day before. I'm hearing the Portland liquor stores are looking pretty good to some of you.
Back to my trifecta of winning sellers. It was no surprise that all three companies employed their signature retail strategies from the outset. These contenders — Costco, Fred Meyer and Safeway — positioned themselves to leave less-skilled competitors stumbling at the starting line. From what I observed, the early local losers included at least one Vancouver Walmart caught with a swath of mostly empty liquor shelves on June 1.
Costco, on the other hand, added a generous sampling of bulk liquor items, encouraging its card-carrying members to buy in exchange for low prices.
Certainly, none of us will be shocked if Issaquah-based Costco emerges over time as the clear-cut winner in private liquor sales, nor if it more than recovers the $22 million it spent backing Initiative 1183, the November ballot measure that privatized liquor sales. It certainly has a big advantage in this race.
Fred Meyer also proved its ability to grab market share early on. Days before private sales started, the Portland-based retailer launched a print-marketing campaign, relying on its one-stop shopping concept to draw patrons into the stores.
From Day 1, Fred Meyer signboards provided an outline of the sales tax charges to be expected at checkout.
I applaud Freddies for the honesty, although none of the stores that I visited — including Fred Meyer — posted information about the additional 27 percent in fees being imposed somewhere in that bottle to compensate the state for closing its lucrative liquor business.
In preparing to sell liquor, Fred Meyer received a lot of help from its Cincinnati-based parent, Kroger Co., said Kimberly Hall, acting store manager at the Fred Meyer at Grand and Columbia House boulevards. She said Kroger offered a wealth of advice because it operates 3,574 stores in many states that already allow private liquor sales.
At Safeway, a dizzying array of liquor bottles were expertly merchandised in the stores' wine-cellar-themed liquor section on the first day of private alcohol sales. The format was a hit with Safeway customers at the company's Southeast Mill Plain Boulevard store. A neatly bearded connoisseur also was working the section, answering questions about liquor varieties in a strategy that seemed miles away from the corner liquor store concept that some price-shocked booze buyers undoubtedly wish they could re-create.
Editor's note: This story has been modified from an earlier version. It's unclear whether Costco can buy directly from distillers.
Cami Joner is a Columbian business reporter. 360-735-4532 or email@example.com.