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Total Wine & More to Break $1 Billion in Sales This Year

May 2, 2011

Shanken News Daily recently interviewed David Trone, co-owner of Total Wine & More, the largest privately-owned, multi-state beverage alcohol retailer in the U.S. Trone projects that total chain revenues will be slightly over $1 billion for calendar year 2011. Total Wine & More just opened its 72nd and 73rd stores last week and is currently operating in 11 states. The Potomac, Maryland-based company was started in 1991 when David and his brother Robert opened their first store, then called Liquor World, in Wilmington, Delaware.

SND: How many stores do you now operate, and in how many states are you doing business?

TRONE: We just opened our 72nd and 73rd store this month in Redondo Beach, California and Reno, Nevada. We’re currently doing business in 11 states and are planning to open five to six more stores this year across California, Arizona and Florida. We feel that opening eight to 10 new stores a year, each in the 20,000- to 25,000-square-foot range, is a good pace. We’ll continue to focus on the markets that have the greatest opportunity for expansion.

SND: What kind of growth did you experience last year, and what are your projections for this year?

TRONE: We had strong growth last year, particularly when you consider how tough of a year it was for retailers in general. The average retail (ring) is coming back up. We’ve seen a very strong first quarter and forecast that we will break $1 billion in sales this year.

SND: That’s quite a milestone. Congratulations.

TRONE: Well, it took us 20 years to get there!

SND: How does your sales total break down by wine, spirits, beer and other?

TRONE: We do anywhere from 55% to 60% of our sales in wine, with the remainder accounted for by spirits, beer and other.

SND: How has the recession affected your business?

TRONE: The recession has had a large impact on the retail industry as a whole. But we’ve been fortunate not to see a major effect on our business. We’ve definitely seen customer purchasing habits change. The average retail (price point) at which customers are buying has decreased. But they’re also shopping on a more frequent basis, which has compensated for that.

SND: How have you customized your business strategy for this new climate?

TRONE: Fortunately, we didn’t have to make much adjustment in our business strategy. When the recession hit, a lot of retailers had to react quickly to adjust their strategy, and many did so by lowering prices to attract customers. We already provide the lowest prices, so we didn’t have to make adjustments there. We’ve always been committed to offering the lowest prices, an incredible selection and great service. We continue to listen to our customers and make adjustments to their needs, based on what we hear from them.

SND: What key trends are you seeing in wine, as well as spirits and beer?

TRONE: Wine is seeing an explosion of sweeter profile wines, with sweet reds and moscato experiencing a lot of growth. Another interesting trend is the emergence of chocolate-based wines. Spirits and beer are both trending to the higher end, and we’re seeing a lot of demand for upscale Scotches, specialty liqueurs and high-end beers. Flavored spirits are also flying, with the introduction of numerous interesting new flavors like espresso, bubble gum, tea and whipped cream. And in beer, the craft brewing revolution continues, with hundreds of new items appearing on the market.

SND: How is your private label, direct import business doing? What percentage of your sales do these brands account for?

TRONE: Private label sales continue to be a large portion of our business, though we don’t discuss specific numbers. We take great care in finding brands that provide quality to the customer at great value, and our customers love that we provide so many options to choose from. But we also have all the brands that are available in wide distribution, and those continue to be a significant portion of our sales as well.

SND: What’s your most effective marketing tool in today’s retail environment?

TRONE: There are so many ways to communicate with customers nowadays that we need to make sure we can reach all of them, whatever their preference. We continue to do a lot of traditional advertising in newspapers, broadcast, and direct mail for customer acquisition. But as more and more media have developed, we’ve expanded into email, Facebook and Twitter. Email is a highly effective tool for us to communicate and engage with our customer base, and we’ve seen significant growth in our email list over the past year. We’ve also seen large growth in our Facebook and Twitter followers. Going forward, we’ll continue to make sure we’re driving these types of “eCommunications” to reach our customers. We’ll seek to strike a good balance between this and more traditional marketing channels.

David and Robert Trone were named Market Watch Retail “Leaders” in 1993 and Market Watch’s Retailers of the Year in 2006.

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