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Market Watch: All Eyes On Texas

March 23, 2018

Earlier this week, U.S. District Court Judge Robert Pitman issued a ruling that struck down Texas’s ban on publicly traded companies selling spirits. In the process, he paved the way for Walmart and other public corporations to enter the market, a move that has the potential to dramatically alter the state’s retail spirits landscape. The Texas Package Stores Association says it will appeal the ruling, but in the meantime, existing Texas retail players like Spec’s, Total Wine & More, Twin Liquors, and others are eyeing the possibility that their businesses are set to face powerful new competitive pressures.

Austin Keith, president and owner of the Odessa, Texas-based retail chain Pinkie’s Inc., says that if Walmart ultimately prevails in the fight, “it opens up everything, so to speak.” Allowing big-box chains into the spirits sales arena is like “taking a pie and reducing it down to a Hostess Twinkie,” he explains, noting that every retailer’s share of the total business would get smaller. “With the high cost of today’s business environment, just to put the key in the door to open it takes a certain amount of revenue,” Keith says. “We need the revenue stream that spirits provide,” he adds, noting that wine and beer are already sold at Walmart and other big-box and grocery stores around the state. Pinkie’s has 15 stores in Texas, yet Keith feels that if Walmart, Amazon, and others gain open access to the market he won’t be able to compete. “I won’t have the buying power,” he says.

Market Watch has a full report on the ramifications of Walmart’s potential entry into the Texas spirits market and other issues affecting the retail business in the Lone Star State.

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