Market Watch: Retailers Report A Strong Start To 2021April 9, 2021
Any fears of a potential Covid-19 retail hangover dissipated quickly this year as retailers continued seeing strong sales—driven by larger average rings and e-commerce—allowing many to ramp up new technology spending and expansion plans. “We expect more growth with larger baskets and bigger sales across the board,” says Ted Farrell, president of the 11-unit Haskell’s chain in Minnesota. “We’ve seen a trend of fewer transactions but sales numbers are going up.”
Overall, beverage alcohol’s retail dollar sales have been bumping up against tougher year-earlier comparisons in recent weeks—slipping 20% in Nielsen channels in the week through March 20—but they remain at highly elevated levels in a more fair comparison with 2019, with spirits up 39% against 2019, and wine and beer/FMB/cider each growing 18%.
While retail alcohol sales usually start the year slowly, 2021 picked right up where 2020 ended. “Historically, everybody swears our industry off for January, and then around Valentine’s Day we see everybody getting back on the wagon,” Farrell says. “We had a 10%-15% increase in sales for the month of January compared to 2020.”
Los Angeles-based Hi-Lo Liquor Market experienced a 90% sales increase in its two stores in January compared to 2020. “We have a very dynamic inventory,” says founder Talmadge Lowe. “We’re bringing new wines, beers, and spirits monthly, and weekly. But growth drivers have been brown spirits, cocktail ingredients, RTDs, and mezcal.” Hi-Lo typically stocks 15-20 mezcal labels, with Madre mezcal ($56 a 750-ml.) the company’s bestseller in the category. Meanwhile, spirits sales in the 1.75-liter size are especially popular at Haskell’s. Tito’s ($26), Captain Morgan ($23), and Svedka ($15) are its leading brands in the large format. “Magnums account for 65% of overall spirits sales,” Farrell says.
Wine sales also remain brisk. Top-selling wine brands at Haskell’s include Kendall-Jackson Chardonnay ($11 a 750-ml.), Lockwood Cabernet Sauvignon ($25), and Silver Beach Sauvignon Blanc ($12). Red wines are experiencing exceptional growth at Hi-Lo, according to Lowe, with popular sellers including Glou, Glou Red ($33) and Love You Bunches Orange ($26).
In addition to further buttressing their e-commerce businesses, Haskell’s and Hi-Lo are also both looking to expand their physical footprints this year. While Haskell’s is aiming to add to its 11 stores in the Twin Cities area, Hi-Lo plans to open its third and fourth stores in the Los Angeles area. “If we can get two more stores open this year, that will double our retail footprint in southern California,” Lowe says. Market Watch has more.—Kevin BarrySubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.
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