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.
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In some ways, while the Cellars retail approach is dynamic, it could also be considered slightly oldfashioned in the age of social media. "I have my own way of doing things," says Reeck, referring to the method he uses to market his promotions through direct mail to a well-established, store-grown database, and via television and newspaper ads. Annual Event Sales T hose annual event sales are crucial to the public perception of the Cellars units. Twice yearly, in January and July, the Cellars stores offer what Reeck calls their progressive wine sale. Starting on the 20th, discounts kick in on all wines and continue to increase – 20% off starting on the 20th and increasing 1% daily and so on until the end of the month. Bargain hunters must pick and choose, deciding whether to buy now or wait until the prices decrease, though since no restocking occurs during the sale, that's a gamble for them "It's fun to watch customers come in, work the sale and figure it out," says Reeck. "They want to squeeze every percentage out of the sale, but if they come in the next day and it's sold out, they're out of luck." "If you restock during the sale it wouldn't work, but it's fun to run out of items. Our customers enjoy it to a large extent and it's well shopped, and while it gives me a chance to clear out inventory that's not doing so well, it's also developed into a profitable sale." Until recently only vintage items were part of the promotion, but Reeck is considering including all wines going forward, and he's trademarked the concept to protect it in his market. The Cellars other major biannual sale, the "Equinox/Odd Bins" promotion, held as the name suggests around the 21st of April and September, gives Reeck a chance to push brands that the stores have taken a major position on, and to present wines that need to move out of vintage or even that could benefit from being shown in two vintages at a time. Here the local suppliers come into play, as Reeck looks for vintages heading out of supply, providing a great way for wholesalers to clean out their warehouses while promoting a brand. "If they give a little on the brand and it makes its way into the store for the sale, it's worth it for them and me," he says. Sales like these often depend on the Cellars purchasing power for success. "It's very important to be able to buy when the opportunities are there and take advantage of them," Reeck says, noting that building wholesaler and supplier relationships helps him uncover volume bargains that he can pass along to customers. Cellars eschews many of the other sales and promotional tools – Reeck sees loyalty program and senior discounts as ineffective. "My brands and pricing speak for themselves," he says, noting that when asked about senior discounts, he'll point out that his base price is usually lower than discounted items at competitors. Currently there are five Cellars in the MinneapolisSt. Paul metropolitan area, in the suburbs of Woodbury, Roseville, Eagan, Plymouth and most recently, Bear Lake. Store sizes vary - Cellars Wines & Spirits of Woodbury, Reeck's oldest store opened in June 1990, is 6,400 sq ft; White Bear Lake, opened barely two years ago, is the smallest at 4,200 square feet, with the others ranging in square footage from 5,700 to 6,800. The new store at White Bear Lake, while smaller, is developing business well, increasing sales by about 30% per year in the face of competition fairly close by. Reeck sold a store in 2011 when out of the blue he was offered a price he "couldn't refuse." Reeck started his foray into beverage alcohol retailing in the late 1980s, when he and partners at that time took over an existing wine and spirits shop. Within a few years, the team had opened two more stores, and while Reeck is now sole proprietor of the five existing Cellars stores, there have been 15 locations along the way. "Opening more stores was a necessity in the development of the company over the years, and as time goes on, I'm aware that it needs to happen if you're going to 24 • Beverage Dynamics • www.beveragedynamics.com • November/December 2013