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Sunday, May 27, 2018
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Publix, Sweetbay ramping up liquor business

TAMPA - Americans have apparently decided that now is a good time to make themselves a stiff drink. And Publix Super Markets has decided they would very much like to provide the necessary liquor. While the economy remains stubbornly rocky, American's taste for liquor at home is flourishing, especially for the largest bottles of decidedly upper-shelf spirits. Publix has opened or taken over 112 liquor stores in the past few years, with more stores set to open in the Bay area this year, establishing Publix among the largest distributors of spirits in Florida. Not so fast say rivals. Sweetbay is opening more liquor stores too. So is ABC Fine Wine & Spirits. And the warehouse chain Total Wine & More is fighting for customers too, especially with its own private label liquors that mimic national brands. Why buy Patron tequila, they say, when you can get "Don Sergio" in a nearly identical bottle for less money?
The clear winner in this retail battle: Drinkers. Depending on their price-hunting diligence, drinkers can save $10 or more per bottle between stores. Case in point, Total Wine sells a 1.75 liter of Absolut vodka for $49.99, while the ABC store on Gandy Boulevard sells the same bottle for $59.99. The same bottle of Maker's Mark bourbon sells for $46 at Publix, but $39 at some ABC stores. These stores have good reason to lure cocktail drinkers, and start competing on price or service. Cocktails are enjoying a 15-year run in popularity, thanks in part to hip and boozy TV shows with characters knocking back more than a few. "Before 'Sex and the City,' the image of anyone who drank distilled alcohol was John Wayne walking into a bar and yelling 'Give me a whiskey and leave the bottle,'" said David Ozgow, chief economist of the Distilled Spirits Council. "All the sudden, you have Samantha and the girls drinking sophisticated pink Cosmos and talking about shoes." Add on the hot trend of gourmet cooking at home rather than going out, and Americans are generally shifting their indulgences homeward. Retail liquor store sales are up 2 percent compared to last year while restaurant revenues plummeted. And not just any liquor will do. While sales of "value" priced liquors slumped this year, trend tracker Nielsen found drinkers reaching for the most expensive vodkas, boosting shipments 10 percent. Whiskeys imported from Ireland grew 20 percent in the three months ended May 1. Flavored liquors of all sorts are growing, and nationwide marketing of rappers drinking cognac is boosting those shipments by 16 percent. In a mirror of the warehouse club craze, drinkers are also buying in volume lately. Smaller bottle shipments fell about 5 percent this year, while sales grew of the largest size that's generally available, 1.75 liters. To attract those shoppers, Publix has big plans for liquor. Up until 2003, Publix had no liquor stores. (A small set of Publix liquor stores in Miami in the 1980s didn't take off.) Since then, Publix bought dozens of Albertson's locations, and with them, along came their liquor stores. Publix is building more - with 112 liquor stores now, 20 in the Tampa Bay area (14 in Pinellas, 3 in Hillsborough and 3 in Pasco) and plans on several more by Christmas. "We saw the demand, and wanted to provide what our customers want," said Publix Spokeswoman Shannon Patten. Publix is expanding selections too, and stocking relatively small stores attached to groceries. If shoppers are already getting groceries, perhaps they'll swing by the liquor store on the way, rather than drive elsewhere, Patten said. Publix is using the same tactic on liquor pricing that it uses on everything from cereal to pasta sauce. Publix will put rotating discounts of $5 or more on 12 different brands each month, and advertise liquor deals right in its major circulars each week. Sweetbay officials are seeing the same opportunity. Sweetbay has built 86 liquor stores, including 35 in Hillsborough and Pinellas. Two more will open later this year. Like Publix, part of Sweetbay's liquor growth strategy hinges on a bit of architectural finesse. Current law says grocery stores can sell wine inside, but not liquor. A liquor store must be a separate location. That can mean an adjacent store in the strip mall. But Publix and Sweetbay found ways around that. The inner foyer area where grocers often pull their shopping carts can count as "outside," so stores can put carts to one side and a door to the liquor store on the other side, giving shoppers the convenience of a single shopping trip. Two other big reasons more liquor stores are opening: They're more profitable, and rents are low. "When you're talking about Publix and Sweetbay and ABC, those are good, healthy companies on a credit basis that landlords like," said Justin Greider, a senior associate at commercial real estate broker Crossman & Co. And compared to the grocery industry average profitability of about 4 percent, a liquor store can be much more profitable per square foot, Greider said. Recently, the Urban Land Institute found a top-performing grocery store might generate $820 per square foot of revenue a year, (most generate less) while a top-performing liquor store generates $961 per square foot. Total Wine has the strategy to build relatively few, but very large warehouse-style stores. A given store stocks tens of thousands of varieties and sizes of wine and liquor, plus cigars and food. Along the way, Total Wine is taking a page from the grocery world and turning to private label brands. Total Wine is contracting liquor producers to make separate runs of liquor under new brand names that mimic national brands. For instance, if customers come looking for the iconic British Beefeaters gin, Total Wine staff will also suggest "Swordsman" gin, which is very similar, even sporting its own British guardsman in red regalia on the label. Along with Patron, Total Wine sells "Don Sergio." "I'm telling you, taste the two, and Don Sergio is Patron," said Total Wine store manager Steve Piazza. "Why not offer customers a way to get what they like and save some money." If customers like the upper-shelf Woodford Reserve bourbon for $29.99, Total Wine has the similar "Paddleford Creek," for $14.99. In that marketing game, sometimes liquor distillers help out. Whiskey maker Macallan makes nearly identical whiskey for Total Wine called "Battle Hill." That costs $39.99, vs. $45 for a bottle of traditional Machalan. Not taking all the competition laying down, ABC Fine Wine & Spirits is revamping all their stores to be more upscale, newer flooring, shelves, lighting and signs. With 152 stores in Florida, 20 are under major remodels, with six more starting every three weeks. "We want the guest to come in, shop and go home feeling smart about what they bought," said Bob Gibson, director of marketing. There will soon be more store events and tastings of wine and food, he said. For shoppers, it's worth knowing that ABC matches advertised prices. But the store also varies prices among stores, depending on how much competition there is nearby. A bottle of Grey Goose vodka at the ABC on Dale Mabry next to Total Wine costs $52.99, within $3 of Total Wine, while the same bottle sells for $59.99 at the ABC on Gandy. Looking forward, liquor sales aren't recession proof. "But we're not like the car industry where sales fell off a cliff either," said Ozgow of the Distilled Spirits Council. Ozgow said he's seeing the same pattern in liquor sales that happened in past recessions. Liquor sales flattened out, then started rising just before an economic recovery. "People are now beginning to trade up a bit," Ozgow said. "And as the recovery takes off, and people are more secure in their jobs, we'll see more sales too."

Reporter Richard Mullins can be reached at (813) 259-7919.

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