Friday, November 20, 2009

5 more Giant Eagles cleared for licensed beer sales in western PA

The beat goes on. Looks like the supermarket beer sale genie is loose, and no one is going to be able to put it back in. Whether Sheetz will be able to overcome the irrational prejudice against selling beer at a gas station or not remains to be seen (what is the issue: you drive to bars, distributors, State Stores...is it something about gasoline fumes that makes you helpless against the insane urge to drink while driving?!!!). Meanwhile, PA consumers are getting a tiny little taste...of normalcy. I challenge anyone to give me a good reason that supermarket beer sales are bad for consumers.

17 comments:

Anonymous said...

One could argue that supermarket sales are bad for the consumer because they have more limited shelf space than distributors, are only interested in selling beer that moves quickly, are more willing to give in to the nationals demand (most supermarkets are chains, unlike distributors) and will not work with the consumer or develop the personal relationship with the consumer that distributors sometimes do. Supermarkets are in the business of selling food. They realize you are in their store to buy FOOD and if you grab some beer since you're already there, great. Ohter than that, they dont care all that much.

One could argue as well that the reason PA had so many old regionals survive was because they were able to maintain shelf space (or pallet space is it were) better than states with supermarket sales.

Lew Bryson said...

One could argue that...but it doesn't hold up under examination. Because when you go to other states, the big supermarket chains -- Wegmans, for instance -- are often the places in town with the best beer selection; I've been there, I've seen it. See, you can make up all the 'this could happen' arguments you want, but there are states where this is actually done, and you can go there and see what happens, no need to speculate. Craft brewers are well-represented (because the supers can actually make good margin on them, and they bring a more well-monied consumer into the store), and specialty grocers/beer stores do just fine carrying the higher-end, more esoteric stuff.

As for your other argument...it's kind of beside the point now. We only have three left -- Yuengling, Straub, and The Lion -- and Yuengling, at least, does just fine in supermarket sales environments outside the state. Straub is profitable and can undoubtedly get into the sixpack biz successfully. The Lion is still making most of their money from contract soda sales, so that's not an issue. Again, faced with facts, that's not an argument.

Bill G. said...

It's still not an ideal situation because these grocery stores have to buy liquor licenses, which drives up the local price and removes a finite resource from another bar.

One thing I love here is the sheer amount of protectionism in the arguments from the distributors, which they hardly even bother to pretend to disguise. Funny, I didn't see you guys complaining about the damage to small businesses when you got Sunday sales and cut into a good source of revenue for taverns.

Lew Bryson said...

Good point, Bill, though I'd say that just points up the need for changes to the Liquor Code; maybe creation of a new type of license, and quickly, before it drives up the market price for a liquor license even higher.

Rich said...

Supermarket sales are only bad for the distributors because it takes away their market share. Suddenly things become cheaper and more convenient and more competitive. Go into any distributor and they will tell you to call your legislators and tell them supermarket sales are BAD, BAD, BAD. They also have the lobbying power (=$$$) that the common citizens don't have.

From what Anon said about establishing a relationship with a distributor...I could say that is hit or miss. I've been in really good ones that will go out of their way to please (Breski's in Middletown) and I've been in the horrible ones that could care less and only stock macros with any reliability. I would agree that supermarkets most likely would not care, but I would also argue that they would have a competitive selection (hence Lew's experience with Wegman's).

What I'd like to see happen all around is to see distributors, or six pack joints do a better job of carrying seasonals and special one-off brews...that can be hit or miss.

Lew Bryson said...

That's the thing, Rich. I was at a meeting of Pittsburgh retailers Monday night, and someone asked about this issue. My response is that this is not a threat, it is a challenge. Sounds like managementspeak, but hear me out. If you view it as a threat, you will focus on beating it, and put all your resources into trying to kill it and make it go away. It is not going to go away, so you've wasted your time, money, energy, and maybe most important, your goodwill. Instead, look on it as a challenge, and improve your service, your selection, how fresh you keep that selection, what you can do for the customer...and they'll still be coming to you, just like I don't buy cheese at the supermarket, I buy it at the cheesemonger (where I just was, and dropped $35, a light week).

Glenn said...

I read your stuff pretty regularly Lew and I am still mystified by the laws you guys have to deal with in PA :-) That being said supermarket sales work well here in NC for craft beer, period! We have locals, regionals and a few almost nationals (Stone etc..) all on the shelves at assorted supermarket chains around here. Sitting side by side with the BMC beers and people just buy what they want

Bill G. said...

I thought that there were deli licenses that would cover this sort of thing.

Most of the Giant Eagles that would be picking up beer sales have some kind of cafe with seating and on-premises food.

Lew Bryson said...

True, Bill, but I'd like to see the number of licenses expanded. I think there are serious problems -- community problems -- caused by too few bar licenses. I'll probably expand on that at the PLCB blog.

Lew Bryson said...

Glenn, don't feel all alone with that "mystified" thing...

Syllogism said...

I am wondering if there is a potential for the move from Distributors to grocery stores might actually reduce the total units purchased. I used to have to buy a Victory Variety case, now I can buy a six of Hop Devil or Monkey or Storm King.. For this argument to be valid, one would have to believe that the distributorship system is forcing people to buy MORE beer because the only access for beer x is by the case.

If this were true, the New Prohobiitionists should be pro Grocery Store sales...

Lew Bryson said...

Cross that with many more opportunities to buy a sixpack, though. There are a fair number of people who aren't buying as often for take-home because they -- understandably -- don't want to buy a whole case of something. Take that away...and watch what happens.

Anonymous said...

I'll match your empirical evidence with some of my own, been to just as many states where the supermarket selection sucks-- Name Harris Teeter for one.

I've got 2 distributors within a short drive of me with an outstanding selection unmatched anywhere else, including wegmans which i have to drive many miles through Pennsyvlania's urban sprawl to get to.

I lived inone of those other states-- upstate New York, and used to shop at the distributors up there or bring stuff home from PA. The supermarkets were NOT good for buying beer.

Bottom line, I wouldnt want to trade my two great distributors for a few shelves at my supermarkets.

Lew Bryson said...

But that proves nothing. Sure, there are states where supermarket selection sucks, there are states where it sucks in some places. I can name you supermarkets in beer-legal states that have a crappy selection. Ukrop's in VA, for instance, speaking of Harris Teeter, has none because of store policy. (Far as that goes, I've been to Harris Teeter's with good beer selections.)

But I've been and seen states where it does work...so it's not the idea, or the law that's inherently flawed. It's the execution by the individual supermarkets and distributors, and that's always going to be true.

Having an exceptional selection nearby is always more a matter of luck and where you live, eh?

Jerry said...

I was invited to Denver for the Steeler game, and my friend got a call on the way to the stadium asking us to pick up more beer for the tailgate. We stopped into a random, unpromising-looking liquor store, and I was able to add a New Belgium 12-pack sampler (I liked the 2 Below) and a six of Dale's Pale Ale to the macro 12-packs we picked up. Everyplace that sells beer may not have something you like, but enough will that retail expansion will likely be a good thing, if only for the convenience.

Ken K. in NJ said...

So if I follow this development correctly, Pennsylvania, which has always had the most ridiculous beer laws of any state I can drive to in one day, has now encouraged a situation where one can have a few beers on the same premises at which one does grocery shopping.

Well hell yeah!

--Ken in NJ

Marc said...

Funny you posted this today. I had my pre-school daughter with me today and I had to buy a bottle of wine, case of beer, do the weekly grocery shopping. As I was getting her in and out of her car seat all I could think of is how nice it would be if I could just get everything in one place! The last thing I want to happen is for the beer distributors to go out of business. I personally think that they do offer a superior selection compared to other alternatives I have seen in other state. I also feel that usually I would go to the distributor to pick up beer. BUT some days it would be nice to have the convenience.