Opening a Wine Store - any store owners out there to share the experience?

From a customer's viewpoint, I would strongly encourage you to include a few quality beverages that may be served before, with, or after a meal. Depending on what country you are in, these might include Cognac, Armagnc, fruit eau-de-vie such as Framboise, perhaps a few quality liquors. In other words, I would suggest a one-stop for buying what you need for a dinner. If customers are forced to go to another store to buy Cognac, etc they need for a meal, they may find it more convenient to buy their wine at the other store also.

That makes sense. I just don't want to fall into opening a liquor store that looks cheap. Thank you,

Andre

It would help to know where you are located. With direct shipping and easy internet access we're seeing a change in the retail wine store business. As a distributor we noted a 14% decrease in sales to retail outlets in 2007 in revenue but a small increase in volume and analysis of those numbers showed an increase in sales of moderately priced French, Italian and German wines and a decrease in sales of domestic value wines. We also noted that 14 retail wine stores closed in Ohio and Kentucky in 2007. I personally knew four of those store owners and all of them closed due to downward margin pressure from larger players and internet sales and increased overhead. The bottom line is that high end, allocated wines are not making it into the hands of the small retailer and it's hard to make a living selling wines priced at under $20 bottle by bottle. Low end wines require large volumes and it's hard to compete against WHole Foods, Costco, etc in that market given the advertising budget and marketing power of the larger players.

Thank you for your very helpful info. I live in New York, but I don't believe opening a store in Manhattan will be an option, considering the exorbitant costs in the city. I do plan on taking a more high-end approach, so your feedback also helps me consolidate my idea a little better. I noticed some new stores popping up around Manhattan, but mostly they have a different and fresh approach to wine selling. They are clean- looking, with one single bottle of each wine on display, good lighting and excellent customer service. I do hope there is still space in the market for me when I am ready.

Again, thank you.

Andre

Good luck.

Thank you.

We had a wine shop open near by that has done well from what I can tell.

His outlook on the shop is to not carry wines that can be bought in the local food stores, have wine that spans the price range of $10 to $279 and do in-store tastings of almost any wine he carries. There are some expections to that of course.

We have a lot of fun there and have expanded our selection because of the tastings. I have a hard time justifing spending $50 on a bottle of wine when I don't know if I will like it. That's not a problem any more as long as I go to this shop!

I am not in the wine business, but know many who are. I live in Connecticut and they let me see the Connecticut Beverage Journal--the monthly price book from distributors to retail. The margins are so low here you have to sell a boat-load of wine to make some money. Amity Wine is one of these "big box" shops. But here near Yale there is one shop, The Wine Thief, that caters to the academic community. They sell some high end beers, high end aperitifs, but find some great wine buys between 10 and 20 dollars. They focus on regular customers and referrals. And wines you will not find anyplace else. They also get some nice allocations. They now have two shops here in New Haven. You might want to get in touch with Karl Ronne and ask for some advice. Give him a call..

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Thank you, Evan. The comments about the low margin is scaring me a little (a lot, to be honest). I will keep your suggestion to call Karl Ronne in mind for when I am more prepared. At this stage everything is very up in the air with me.

dream is to open a wine store (wine only, not a generic liquor

HI Mike. My main idea is to allow customers to taste every single wine available at the store. I do believe not tasting the wine keeps people from buying whatever they don't know. Thanks for the tip.

Andre

Andre, I am not a retailer, but as a consumer I can tell you that you'd have to invest in a large-scale wine preservation system to do what you want. It makes no sense to taste all your wines if they are going to oxidize quickly and not show well after a day or two (and too expensive to open up a new bottle of each wine every day). I like the idea, though. I've been to several retailers that have "stations" that dispense wine scattered throughout the store: you purchase a card that then can be placed in the station to dispense a small pour of wine into your glass. It's a very flexible system, but rather impersonal.

Mark Lipton

Good point Mark. Additionally if you don't charge for the tasting you will be increasing an already burdensome overhead. I think that these plans always sound good on paper but when it's your capital at risk it gets harder and harder to justify the expense of opening even $25 bottles just for the casual taster. The reality is that high end wine sales have been relegated to the few old time retailers around the country with the track record, cash flow and sales to garner a supply of high end wines since most of them are now extremely allocated and come with very large strings attatched to boatloads of plonk. The business model for many of the US winemakers is to only allow distribution to restaurants forcing the consumer to purchase wines directly from the winery. The harsh reality is that wine is a comodity no different from widgets, gadgets or any other consumer product and when you stop thinking about it as such and start getting esoteric and artsy about it, you will probably end up very unhappy (and possibly broke) with the wine business. It's about volume and velocity and relationships and those are all hard things to control at times.

It's really the same as in book or electronics retailing: you can't compete on volume or profit margin, or the big operations will drive your business into the ground. Instead, you have to focus on the items the big guys won't stock because they aren't made in large enough quantity. My favorite wine stores have just a token stock of "trophy" wines and instead focus on $10-$30 bottles from smaller, artisanal producers. Returning to the original topic, the model I love is that of Solano Cellars in Berkeley, which has a small wine bar in the back where they pour a weekly selection of their inventory (6 red, 6 white) for $3-6 per pour and sell small plates of food. It sounds like the Terroir Wine Bar in San Francisco is built along similar lines.

Mark Lipton

Yes, exactly and these are the new guys on the block who are going to make it over the long term provided that they make the right buying choices within the $10-$30 range. I beleive that there are plenty of wines to fill that niche but most of them are not domestic. I have seen a few "Vino 100" franchises that are for sale that don't seem to being to well though. I don't know if you have any in Indiana but we have a few in Ohio.....100 wines for $25 or less. The company is a franchise deal.

dream is to open a wine store (wine only, not a generic liquor

Andre As others have mentioned, that could be costly. The way our local shop handles the tasting is to have as small number of reds and whites open at any given time. The choices vary. I haven't been to the shop two days in a row to know how often he changes the choices. I'll have to ask. He also does a bigger tasting on Saturdays to accomodate larger crowds.

Once the owner gets to know a person and their buying habits is when the fun starts. There have been evenings when three or four regulars are in at once where he will open a nice red (D2 is one that I remember) that everyone buys two or three of when they leave.

One of the stores that I frequent has a twice-a-week tasting. On Wednesdays, a wholesaler is pouring 6 or 7 wines that he has brought in along with some bread and cheese. That is not costing the owner a thing. On Saturdays, he has a few wines that are on special to taste, mostly to get the customers in the store. He also does a news letter and a number of other things to keep track of who his customers are. A friend of mine opened a wine store on the beach here in Florida so he could be close enough to the water to surf anytime the waves were up. He has now found himself chained to the store because he can't find any hired help that he can trust to run it for him. Another friend opened a store with his wife and daughter as his back up. He only works three days a week and is enjoying the life.