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The Rise Of Stew Leonard’s Wines: Annual Sales Hit $100 Million In Just Over A Decade

July 15, 2011

Tri-state area upscale grocer Stew Leonard Jr. expanded into wine retailing in 1999, and today there are nine wine stores bearing his name: three in Connecticut, three in New York state and three in New Jersey. Stew Leonard’s Wines operations now ring up total annual sales of $100 million, having rapidly emerged as one of the biggest players in the tri-state wine business. (Stew Leonard’s sells wine, distilled spirits and beer in Connecticut and New Jersey, its newest market, and wine and spirits only in New York.) Shanken News Daily recently spoke with Leonard, who also serves as president and CEO of the four-unit Stew Leonard’s Farm Fresh Food stores.

SND: What are some recent trends for wine at Stew Leonard’s Wines in the aftermath of the recession?

Leonard: People are definitely drinking more. Consumption is up. We just had the best Fourth of July that we’ve ever had. But the price points are definitely dropping. People are shopping for value. Customers who used to come in and buy $100 bottles of wine are now looking for $50 bottles, and those who used to spend $50 are looking to spend $25.

SND: How are you responding?

Leonard: We’re offering a lot of wine values. We now have more than 1,000 wines priced below $15. Just as we’ve found with cheese in our food stores, sales of an item move much faster when they’re priced at $9.99 rather than $10.99 or $11.99. At one of our stores, we were selling 100 cases a week of Cavit Pinot Grigio, priced at $10.99 (a 1.5-liter bottle). We dropped the price to $9.99, and sales doubled to 200 cases a week. These days, we’re not looking so much at gross profit percentages, but at gross profit dollars.

SND: Like other leading wine retailers, Stew Leonard’s Wines now offers online wine sales to a number of states. What results are you seeing so far with that initiative?

Leonard: We’re finding that whenever we promote something on the Web, people come in and buy it at the stores. If we advertise a great item on the Internet, we find it really drives traffic to the stores. And that’s really what our Internet strategy is. I don’t think we’re ever going to be a big online wine retailer. We’ll let everyone else do that. We just want to be great retailers, and we’ll use the Internet to communicate with our customers and bring them into the stores.

SND: In the last three years, Stew Leonard’s Wines has nearly doubled its number of store locations. What have been the best accomplishments and the biggest challenges?

Leonard: Our greatest accomplishment has been to become one of the largest wine and spirits retailers in the tri-state area, and I think that’s due to each store’s great selection and dedication to customer service. Our people are also a great accomplishment. Last year we had more than 300 team members attend training classes—everything from Wine 101 to more intensive classes exploring specific regions like Bordeaux, Burgundy and the Southern Hemisphere. Our biggest challenge has been the fact that each store is individually owned and operated. We’re not a chain or a cooperative buying group. This makes achieving operational efficiencies more difficult, but we counter that by openly sharing ideas, best practices and business-building initiatives.

SND: What are your expansion objectives going forward?

Leonard: We do plan to expand, but right now we’re focusing on improving our existing stores, signage, brochures, in-store tasting demos and staff training. As they say, retail is detail. Right now we’re catching our breath and going over the details.

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