2 big-box liquor-store chains may make stir in Washington
The BevMo! and Total Wine & More stores, each opening stores in Washington with plans for more, are unlike anything this state has ever seen. A Bellevue store measures almost 30,000 square feet, the size of a large grocery store.
Seattle Times business reporter
Two major liquor retailers — one calling itself "Costco's worst nightmare" — opened their first Washington stores this week, bringing more competition and lower prices on some products.
The arrival of BevMo! and Total Wine & More comes less than a month after Washington liquor customers experienced sticker shock at grocery stores, which started selling spirits June 1 under the state's new liquor-privatization law.
The BevMo! and Total Wine stores are unlike anything Washington has ever seen.
The new Total Wine store, at a former Larry's Market in Bellevue, measures almost 30,000 square feet, the size of a large grocery store.
While supermarkets entice customers with colorful produce when they enter, Total Wine's entrance features an old hydroplane surrounded by dozens of 1.75-liter bottles of Absolut vodka.
Behind them is a display case filled with booze, including "Adult Chocolate Milk" and Avion tequila.
Wine is stacked to one side of the hydroplane under various headings, including "crisp and clean," "fresh and fruity" and "big and robust." On the other side, a refrigerator case is packed with expensive wines, including a 1999 Screaming Eagle cabernet priced at $2,699.97.
Total Wine, based in Potomac, Md., operates 81 stores in 13 states, and company President David Trone brags that it's "Costco's worst nightmare."
"We're able to sell at Costco pricing and yet offer 8,000 wines, 3,000 spirits and 2,500 beers," Trone said.
Its selection certainly beats Costco's, and even the stock at Washington's 300-plus state liquor stores, which shut down in May in accordance with Initiative 1183, a voter measure written by Costco and passed by voters last fall. The vast majority of those stores moved into private hands after an auction this spring.
Total Wine plans to have 10 locations in Washington, starting with Bellevue, Southcenter and Spokane this year. Future sites include Alderwood, the University District, Silverdale, Federal Way, Tacoma and Vancouver, Wash.
Trone said Total Wine's prices often beat Costco's because of the chain's buying power. Sales will reach nearly $1.3 billion this year, he said.
Costco's buying power is stronger; it sold $2.6 billion in beer, wine and liquor during the fiscal year ended last August.
Still, a quick check Wednesday, before the store opened, showed Total Wine's prices on some popular products are below Costco's.
A 1.75-liter bottle of Johnnie Walker Red is $52.38 at Total Wine and $54.79 at Costco, after all taxes. A same-size bottle of Kahlua is $41.53 at Total Wine and $43.94 at Costco, also after taxes.
BevMo!, which also is known for low prices, opened its first Washington store in Tacoma this week. The Concord, Calif.-based company plans to open a store in Silverdale in early July and at least two more in Washington by Thanksgiving, said CEO Alan Johnson.
Its 116 stores in California and Arizona have about half the square footage of Total Wine's.
But they, too, beat Costco on price, Johnson said.
The chain regularly holds wine sales in which its ClubBev! members (Johnson jokingly pointed out that his own name does not have an exclamation point) buy one bottle of wine and get the second bottle of the same type for a nickel.
Johnson is unsure how the presence of BevMo! and Total Wine will affect pricing in Washington.
"Just getting the product has been a challenge," Johnson said. "There are all sorts of challenges on the supplier side, and I can only control what happens at BevMo!"
Many challenges came from the speed with which the Washington State Liquor Control Board shut down its business.
"Everyone is impressed with how fast Washington moved," said Trone, of Total Wine. "Six months is unbelievable to convert from a government to private system."
David LeClaire, founder of Wine World & Spirits near Northeast 45th Street and Interstate 5 in Seattle, runs a big store — 23,000 square feet — but does not have the buying power of a chain.
"It's very difficult for us to carry the 200 or 300 most common grocery-store brands, because they (Total Wine) will basically undercut even what the grocery stores do," he said.
His strategy is to focus on products that are unusual or made in small batches rather than mass-market favorites.
Since the June 1 transformation, Wine World customers have preferred buying locally produced spirits, bourbons from Kentucky, and scotches that are harder to find. It's a niche that pleases customers and makes it easier to deal with suppliers, LeClaire said.
Total Wine, by contrast, "is not well loved by local wineries, because they grind on you on price," LeClaire said. "They're tough. You can sell to them, but you're not going to make much."
Mark Powell, Total Wine's executive vice president of retail store operations, said it prides itself on relationships with suppliers.
"If they're not successful, we're not successful," Powell said.
Melissa Allison: 206-464-3312 or firstname.lastname@example.org. On Twitter @AllisonSeattle.