Retailers enhance wine displays as popularity rises: product promotions reflect market research, consumer preferences - Beverages - Brief Article - Statistical Data Included

DSN Retailing Today, July 29, 2002 by Mike Duff

The buzz on wine is getting better for mass-market food retailers that are developing more sophisticated operations. All their merchandising tools are being applied, but target audiences frequently vary.

Consumers clearly have adapted to purchasing wine at mass-market outlets. In the 53 weeks ended May 18, total food, drug and mass merchant sales of wine, excluding Wal-Mart, advanced 5% to $4.15 billion over a 5.5% gain the year earlier. The more upscale categories tracked, such as imported table wine, advanced the most in the latest year, up 13.4%.

For warehouse clubs and Target super-centers particularly, wine has added some hefty per-item rings. The growth of wine in warehouse club stores has included geographical expansion, as the chains have grown, and additions in assortment, with high-end growth being the most conspicuous.

Still, the majority of the wines offered at clubs fall into a more modest range. For example, at a Sam's Club in the Atlanta suburb of Alphareta, bottles selling for less than $10 dominated a pallet display of wine. However, Sam's provided a range of more select domestic and international wines on a table display. Its top price point was $98.91 for a bottle of '89 Perrier Joet, while a bottle of '93 Dom Perignon went for $71.98.

The available assortment is a function of member preference, said Melissa Berryhill, a Sam's spokeswoman. Sam's incorporates both market research and store-level feedback in developing selections that mirror consumer preferences in various markets, as well as product promotions that evolve into new offerings. Some promotions, though, are simply meant to generate excitement. "For example, we might offer our members two cases of a particular hard-to-find wine, and then it's gone," she said.

Not every retailer's wine display is as expansive as Sam's. In its supercenters, Wal-Mart focuses on products most popular with customers. They are then offered at sharp price points, said Bruce Peterson, vp of food merchandising. Variation arises based on preferences expressed by consumers of individual stores.

"We may find certain stores with certain demographics and an average income where the customer is asking for a higher price or a higher perceived quality item at certain times, and, to the possible extent, we'll have that for them," he said.

At an Alphareta SuperTarget, store manager Bryant Kline told a tour group from the recent CIES World Food Business Summit that wine operations were lucrative. The store mounts a wine rack that extends the length of a full aisle, or about 60 feet. Eight feet of wine and wine coolers face it across the aisle. Like Sam's, the great majority of wines cost less than $10. A high-end wood rack that held some of the pricier and promotional vintages--greatly raising the profile of the display--topped the main wine assortment. "This fixture has been a great moneymaker for us," he said.

It should be noted Target wasn't afraid of the pricier vintages. Dom Perignon '93 was the top price point item at $120.99, though Sam's had it beat by about $50.