TN: Liquor stores brace for impact of wine in grocery stores

Nolensville Home Page

By Emily R. West, Samantha Hearn and Quint Qualls

June 30, 2016

Standing behind the counter in her Nolensville store, R&B Liquors owner Bonnie Huang does business as normal.

Customers are filtering in and out around 10 a.m. Thursday. Though the time is counting down for her and many others across Williamson County who will face competing against area grocery stores.

While Nolensville doesn’t have a grocery store within its city limits, most head up the road to corner of Nolensville and Concord roads, where a Publix sits along the county line in Davidson County.

“So far, I don’t have a opinion about it,” Huang said. “I do everything I can do. I wouldn’t change my business model. Everything is going to stay the same. I am just going to wait and see.”

In November 2014, the Tennessee General Assembly passed the legislation to allow the sale of wine in grocery stores. It allows wine sales in stores that derive at least 20 percent of sales from the retail sale of food and have retail floor space of at least 1,200 square feet. In September 2015, the Brentwood City Commission passed an ordinance to amend the code to allow grocery stores to apply for licenses to sell wine.

In Brentwood, the new Kroger on Franklin Road as well as the Publix in Maryland Farms will be selling wine.

For Maryland Farms Wine & Spirits, business is about to change.

“We are expecting a dip in our overall sales, at least for now,” Stephen Smith, an employee at Maryland Farms Wine & Spirits, said. “This just means we have to make our service better and improve what we do.”

Maryland Farms Wine & Spirits has been in Brentwood for 10 years, and they carry thousands of wines in addition to spirits and other liquors. They carry wines from all over, bottles from almost every wine region in the world.

“For the most part, a grocery store’s price point is going to be in that $10 to $20 range,” Assistant Manager of Maryland Farms Wine & Spirits William Bergh said. “But for the same bottle, a customer can come here and it’s going to be $1 to $2 less than what it would cost them at the grocery store.”

Randy Wilkes, owner of Station Wine & Spirits in north Spring Hill, said he expects to see a drop in sales, but not customers.

“Our biggest challenge moving forward is going to be trying to remain as competitive as we can,” he said. “And since some stores have started posting their pricing and others have not, we don’t really know where we’ll shake out with regard to that competitive pricing.”

Another factor in keeping local liquor stores competitive will be an edge in knowledge and service, according to Wilkes.

“If they need help, if they need somebody who knows the specifics of all these different wines, I’m not sure they will be able to find that help at the grocery store,” he said. “They may be able to. I don’t know. I don’t know how they’re going to staff it, how it’s going to play out for the consumer’s interaction at the grocery stores, but we’re assuming we’re going to have the knowledge base.”

Because of the wine expansion in Tennessee, stores like Maryland Farms Wine & Spirits are offering other items for sale to better compete with big companies like Kroger and Publix.

“We sell beer and cigars, glassware, some food items,” Bergh said. “We’re carrying some local products as well like jams, olives and jellies, and we also have grill sauces and rubs. But it’s really our expertise that sets us apart from a grocery store experience.”

Bergh said that Smith is a “wine encyclopedia,” having studied wine for more than 10 years of his life. It was a hobby when he was younger, and after changing careers from TV advertising to beverage he decided to study it more intensely.

“That’s just not their niche,” Smith said. “For big stores it’s just a shelf item, an addition. For us, it’s our primary business. Seventy percent of our store is wine. We study this every single day.”

Bergh said that one of the biggest issues with wine sold in grocery stores is that the tax revenue goes to other states.

“With local stores, you know the tax revenue goes to the state, it goes local,” he said. “You don’t get the same thing when you buy it at a big company or chain store.”

Brentwood held a referendum in November 2014 that garnered nearly 80 percent approval for the sale of wine in retail food stores. Starting Friday, July 1, wine will be sold in grocery stores across the state of Tennessee.