While wine sales soar, smaller stores aren't drinking in the profitsBy MICHAEL COUSINEAU
New Hampshire Union Leader
April 26. 2014 11:33PM
MANCHESTER -- New Hampshire stores sold more than 26 million bottles of wine in a year's time.
Consumers bought more of the liquid grapes in supermarkets, drug stores and wine stores than they did at the 78-state owned liquor stores.
But state liquor stores actually banked $42.3 million more in wine sales for the year ending last June.
"We're selling a more expensive bottle of wine," said Joseph Mollica, chairman of the State Liquor Commission.
State-run stores averaged $11.30 per bottle vs. $7.65 per bottle at 4,700 licensed wine-sale locations, namely supermarkets, drug stores and convenience stores, according to sales figures analyzed by the New Hampshire Union Leader.
Retail sales were up about 6 percent for the year ending last June. And sales for this fiscal year are running about 4 percent ahead, Mollica said.
"The American palate is more distinctive, and people are buying and choosing higher-end wines to purchase," he said.
But not everybody is sharing in the sales growth.
Last Thursday, The Wine Studio in Manchester began its "store closing sale."
Owner Maureen Adams said the prime reason for closing the store, near the intersection of Hooksett Road and Webster Street, was "increasing competition from the state of New Hampshire."
She said she couldn't compete against special sales held at state stores.
"When they put on a sale, it's lower than it cost me to buy from them," Adams said.
Mollica said private shops buy most of their inventory through the state, receiving 20 percent off the retail price.
"We don't set the prices in their store," he said. "They can sell them as high as they want or as low as they want. We don't set the price in any of the off-premises licensees."
Mollica acknowledged "power buys" state stores offer sometimes price a $57 bottle of wine for $25. He said private stores sometimes can arrange direct-ship deals with specific wineries.
"We don't target any competition in the state," he said. "We're the wholesaler to these small wine shops, and Market Basket and obviously everybody in the state."
Adams said she offered weekly wine tastings and priced many of her wines only a dollar or two above state stores in many cases. When she started eight years ago, Adams said state liquor stores focused on top sellers, and she found other wines for customers.
"It was a great niche" at the time, she said. Adams said it became harder to differentiate her stock, which included more than 600 wines.
Adams, who lives in Merrimack, said she sold between four and five cases a day. Wine sales made up 75 percent of her overall sales with the remainder coming from the sale of glassware, plates, T-shirts and other items. But the store turned unprofitable, and she said she was ready to retire.
Customer Janet Green of Manchester surveyed the merchandise, which was marked down 10 to 30 percent last week.
"I think it's part of what's going on with the economy," Green said. "People can't afford their inventory. Too much competition in grocery stores."
Green said she looked to pick up some gifts. "I like all the mom and pop stores, but they're all closing," she said.
For the year ending June 30, 2013, state liquor stores sold nearly 12.8 million bottles of wine compared to 13.3 million bottles sold at supermarkets, drug stores and at other retailers. Consumers that year bought a total of 1.57 million more bottles at all stores than during the previous year.
Sales in bars and restaurants added nearly 2.2 million more bottles, bringing total sales to 28.3 million bottles for the 2013 fiscal year, a 6.1 percent gain over the previous year. Total wine sales, including restaurants reached nearly $269.2 million, or nearly $15 million more than the previous fiscal year.
At Ceres Street Wine Merchants in Portsmouth, proprietor David Campbell said his sales have been flat in recent years.
He had a simple answer on how he competes with state liquor stores.
"I don't. I complement them," Campbell said Friday.
"When I first started our store here 23 years ago, I noticed a need for someone with specific knowledge in fine wines, and that's what I do. I sell fine wine and let them sell everything else," said Campbell, who calls his business the state's oldest and largest private wine shop.
Campbell said his wine sales average about $25 a bottle and has some vintages that run upward of $5,000. He said his business has developed a clientele, including many out-of-state summer visitors.
"When you have a fine wine store and you know what you're doing, they come to you," Campbell said.
He said he heard about The Wine Studio closing.
"All I can say, being the oldest operating private wine store, is they come and they go," he said.