Beverage Dynamics is the largest national business magazine devoted exclusively to the needs of off-premise beverage alcohol retailers, from single liquor stores to big box chains, through coverage of the latest trends in wine, beer and spirits.
Issue link: http://read.dmtmag.com/i/58579
A part of the beer section in the Bristol store, which comprises about 35% of overall store sales. Close Supplier Relationships W ith this buying approach, close rela- tionships with suppliers and wholesalers is key. Some consult with him on the price cut they are willing to take, knowing that if Crazy Bruce's takes a large position in a product, Bradley and team will work hard to sell it, and not buy and hold hoping for the highest return. It's complicated, though: to make the deal, wholesalers are required by min- imum pricing laws to register a prod- uct with the state as a closeout in advance, so settling the price with buyers like Bradley is the first step, as he can't list wine or spirits below the wholesale bottle cost. This pricing maneuver is espe- cially important at the West Hartford store, less than 30 minutes from the Massachusetts border. Stores there, with no sales tax (Connecticut tacks on 6.35%), a lower excise tax and no minimum bottle law can sell wine and spirits at the cost of acquisition. The story is similar with beer, but here, Crazy Bruce's has more price leeway, since he's allowed to sell at the cost of acquisition. "If Bud costs me $14.99 a case, I can sell it that month as a loss leader to entice people to shop here that month. I know, come the holidays, if I'm going to spend $5,000 on newspaper ads, how much more I will make if I sell beer at cost." It might "Many spirit items are purchased for a year at a time, to make sure we pay the cost him a thousand dollars in Budweiser prof- its, but the Crazy Bruce's way is to gamble that the 200 customers who are enticed by the low beer price will buy other items as well. Both are big A-B stores, but being New England, craft is a major part of Crazy Bruce's business. Local favorites Long Tail, Harpoon, Shipyard and Sam Adams do very well, espe- cially the seasonal releases. Here, too, Bradley makes a deal: when brewers release a new sea- sonal, chances are the previous edition is still in many stores, leaving wholesalers with some overstock. So when, say, the Sam Adams win- ter release comes out, Bradley checks to see how much Oktoberfest is available, and cuts the price to the minimum mark-up. "Customers frequently ask me, 'What's the next close-out beer going to be?' If they're getting a six pack for $4.99 that retailed at $7.99 a week before, they're happy." With a long aisle of crafts sold, Crazy Bruce's makes sampling easier by hanging empty six packs for customers to mix and match and try at about 10% less per bottle. "Some of these are very expensive beers, $10 or $11 a six pack, and people are reluctant to spend that much on something they're afraid might be too hoppy or bitter they've never tried before. This way, they can find out." lowest possible price." — Michael Bradley,West Hartford store manager and buyer for both stores Just the way Crazy Bruce might have done it. Not a bad way to run a business – build loyalty through well- known or reputable brand deals and anticipation about what the next big bargain will be and the regular customer will reward you with enthusiasm and dollars. You might have to be crazy to start out that way, but Crazy Bruce's has proven that like the proverbial fox, the original knew what he was doing after all. s 48 • Beverage Dynamics • www.beveragedynamics.com • March/April 2012