Does this chilled wine center make direct profit for the store or is a loss leader

[GON]

Stopped in a Fry's (Kroger) in Scottsdale AZ this evening, and came across something I have never seen. A walk in white wine "cooler".

Very elegant and nice cooler. But nobody was in the cooler. I wondered how this very expensive to Fry's use of store square feet generated a profit?

Does white wine sell that much at a huge markup, or maybe this cooler is a way to get customers in the store to buy other items of high profit, like cheese?

 

[Passport1]

Perhaps it is a concession that Kroger rents to the wine company. The company has almost no overhead since the food store sells the merchandise for the company. Brings in customers to the store and costs the food store nothing but the electricity. Makes money either way.

 

[99Saturn]

Is there significant markup versus wherever else white wine is sold locally? Is it the norm to sell wine at a grocery store (the only additional overhead is the cooler in other words)? Doesn't seem that crazy to me, many Wegmans have large beer coolers and ton's of floor space dedicated to craft beer varieties galore, typically fully stocked.

 

[SC Maintenance]

It would have to be above normal markup or they wouldn't stock it. Grocery store's have their shelf space figured out to the penny. There essentially "renting" shelf space. Stuff that turns the shelf multiple times per day can live on low margin. Stuff that turns maybe monthly - like wine - must be huge margin. There are companies lining up to get shelf space, so its not sitting there at a loss. The exception is the extreme staples - basic milk, basic bread, etc - to get people to come in.

As for the cooler. Its probably trendy, hoping it makes people feel more upscale. ie its a marketing cost.

 

[GON]

Is there significant markup versus wherever else white wine is sold locally? Is it the norm to sell wine at a grocery store (the only additional overhead is the cooler in other words)? Doesn't seem that crazy to me, many Wegmans have large beer coolers and ton's of floor space dedicated to craft beer varieties galore, typically fully stocked.

I have seen beer "caves" all over the US, but always thought that beer sells a lot and a walk-in cooler is more efficient than stocking the cooler shelves throughout the day. I speculate not a lot of multiple restocking going on in the white wine cooler throughout the day. But I could be way off......

 

[dishdude]

It's a Kroger in Scottsdale, they're trying to be fancy

 

[Kira]

What I think you're seeing is a multiple use room.

That room could be used for wine tastings too. The tables tell that story. There's one liquor store near me with an identical tasting room.

Also, one liquor store has a similar wood highlighted room used as a cigar humidor.

The real 'questionables' near me are two mini classrooms set up for a dietician (ShopRites -aka Wakefern Foods) to hold nutrition classes. A few revolving wire racks with readers (non-prescription glasses) are set in to make use of the space when not in use. And I must say, I haven't seen a class being held in either one in a long time. Come to think of it, I haven't seen the dietician in either since before the pandemic.

 

[dkryan]

Scottsdale……….in August………

You would think ANY chilled room would be crowded………the wine would be a plus!

 

[simple_gifts]

Is it the norm to sell wine at a grocery store

Varies widely by state law; in CT and a few other states wines sales are not allowed.

Who wants to drink warm wine? I vote it is an appeal to last minute decision makers and "oh darn, we need to bring something to the party" crowd

 

[fdcg27]

If it don't make dollars it don't make sense.
I'd therefore guess that the yields per square foot must be healthy enough to justify the allocation.
If not, the store would, or maybe will, find a more productive use for the space.

 

[GON]

Scottsdale……….in August………

You would think ANY chilled room would be crowded………the wine would be a plus!

Last night I spent the night in Scottsdale. Window open in my hotel room, and air conditioning turned off. Best sleep I have had in eight weeks.

 

[99Saturn]

Varies widely by state law; in CT and a few other states wines sales are not allowed.

Who wants to drink warm wine? I vote it is an appeal to last minute decision makers and "oh darn, we need to bring something to the party" crowd

Yeah - that was actually my point of asking - I have no idea what the law is in AZ. In NY, you go to a liquor store to buy wine and liquor, beer at grocery, gas stations but not a a liquor store AFAIK, but I know that varies state to state. Actually, there is some allowance for stores that sell food in NY to sell something that can loosely be defined as wine, but for the most part wine is at a separate liquor store.

Anyway, if SOP is to buy your wine at a grocery store in AZ, I don't look at the cooler aspect as that crazy, just a convenience in line with your thought.

I have seen beer "caves" all over the US, but always thought that beer sells a lot and a walk-in cooler is more efficient than stocking the cooler shelves throughout the day. I speculate not a lot of multiple restocking going on in the white wine cooler throughout the day. But I could be way off......

I'd agree guessing beer sales nationally are significantly more. My point was more, the store I'm thinking of has a "cave" for beer, looks like it would be similar to the pictures you shared, dedicated wall coolers for cases, two or three 6-8 foot sections for individual cans also cooled and floor space for 4 packs to 6 packs (three to five 8 to 12 feet long aisles - two sides) craft beers. Wish I had pictures. Way more selection than I would expect for a local grocery (not actually local to me, 2 plus hours away). The selection at the last Wegmans I went to is probably 1.5x to 2x the local beer store in our town - maybe that reflects more on the local beer store than the Wegmans.

 

[PimTac]

The Fred Meyers store which is owned by Kroger that I shop at had a big remodel several years ago. They had one area set up for wine tasting and purchase right up front. They barely finished it and then the hit. They gave up on it and now it’s a sports area for the local teams. I never see anyone in there.

It wasn’t set up like that wine cooler idea though, it was more like a bar inside the store.

 

[Vil_Riker]

Adds class to the store and moves them upmarket.