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ABC Fine Wine & Spirits Modernizes And Consolidates To Keep Pace With Florida Trends

April 16, 2014

Orlando-based ABC Fine Wine & Spirits continues the massive modernization plan it began several years ago and has consolidated its business in the Sunshine State to 142 units from a previous high of 200 (14 years ago). Chairman & CEO Charles Bailes notes, “It’s not a numbers game anymore in terms of number of stores. I pay attention to sales and obviously to our bottom line.” ABC’s sales are on the rise, despite increased competition from rival chain operators and grocery stores. Its total revenues last year reached an estimated $500 million. Bailes recently spoke with SND about Florida trends and ABC’s role within the market.

SND: A few years ago, you were in the middle of a massive modernization of your stores. Is that still ongoing?

Bailes: Yes. We’ve completed about 85 stores. We recently launched a new exterior concept in Tampa and Cape Coral, followed by two additional stores in Winter Park and Clermont. Going forward, all our locations will have it.

SND: Are supermarkets your biggest competitors?

Bailes: Publix didn’t have any liquor stores in Florida 20 years ago, and now they have 170. The four big chains—Publix, Winn Dixie, Walmart and Sweetbay—today have 380 liquor stores. A decade ago, I could count them on both hands. But our business since then is up, although the independent market is shrinking. Most shopping centers have a grocery anchor, and somewhere in that shopping center was a small liquor store. Now it’s a supermarket liquor store.

SND: How intense is price competition between you and your competitors?

Bailes: There’s no bottom. Florida is one of the most price-competitive states in the country. There are no restrictions—everybody can sell everything, with the proper license. In every industry, people use recognized brands to draw people into the store. In Florida they do it on a grand scale.

SND: How are your spirits sales?

Bailes: They’re very strong because of the explosion in flavors—in vodka and Bourbon. Female customers are now buying Bourbon, and we had never seen that before. So Bourbon is on fire, as are rye whiskey and moonshine. Vodka is still very hot, as are the flavors. We’re constantly eliminating the bottom performers to make room for the new items.

SND: What’s happening on the wine side?

Bailes: California accounts for about 70% of sales. In Florida, drugstores have started carrying 3-liter wines, though not in broad selections. We compete in that business but haven’t chased it. It’s very price competitive and occupies a lot of space. But our wine business continues to grow despite declines in 3-liter sales. As for imports, Italy’s on fire, particularly Italian sparkling wines. Beaujolais Nouveau was fair at best last year, which gives some indication about French wines.

SND: Is private label a bigger share of your business than it was a few years ago?

Bailes: ‘Direct to You’ is the name of that category in our stores, and it’s very healthy. It’s necessary to be able to price-compete against national brands, because you need a blended margin to pay your bills and make money. I don’t know how retailers who don’t have a healthy, quality proprietary portfolio can make it. Ours is healthy and has continued to grow over the last few years.

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