Tuesday, November 17, 2009

Do mom and pop wine shops support their own extinction?

An ad on the website of The Daily News pointed out this website.

It claims It is time for New York to support small businesses throughout the state, from Upstate family farms to mom and pop wine shops.

Yet in fact, it calls for support of a bill that would allow wine and liquor sales in mega chain supermarkets, something that "mom and pop wine shops" can't be too thrilled about.

Its deceit is further evidenced by repeated use of the phrase "Big Liquor Myth" to hammer home its dubious pretense to represent small wine shops.

This group, which is backed by the mega chain supermarkets, claims that "Big Liquor" (whatever that means) is opposed to this change. But it also claims that sales of alcohol would skyrocket if this change were implemented. So why would the mythical "Big Liquor" oppose something that would see liquor sales increase?

Whether you support or oppose the sale of wine and liquor in mega chain supermarkets, this self-interested deceit is something that we could do without.


Matthew said...

1. I would argue that having liquor in supermarkets hardly effects the Mom & Pop liquor stores. They cater to vastly different markets.

2. Supermarkets are already allowed to sell alcohol, so why not the wine & hard liquor?

3. One of the more bizarre sites I saw was wherever there was a supermarket (which they are allowed to sell wine there, not sure about the hard liquor), there were usually 2-3 small liquor shops w/n eyesight of the supermarket. They must be doing something right to stay in business, whether it be focusing on customer service, product knowledge, or carrying a superior product.

Brian said...

As for your example (you don't mention which state), if the supermarkets can't sell hard liquor, then that would explain why the liquor stores are within eyesight. As an analogy, you don't see too many independent bookstores within eyesight of a B&N (or Wal-Mart).

Right now, if you want liquor or wine, you HAVE to go to a liquor store. If they are sold in supermarkets, that will be no longer the case. It's pretty much inconceivable to me how this wouldn't draw business away from mom and pop shops.

Right now it's a level playing field. Liquor stores can sell ONLY liquor and wine, no beer... not even wine glasses for crying out loud. Supermarkets can sell ONLY beer, not liquor or wine. Even if you allowed both to sell both, supermarkets would drive a great many small shops out of business because of volume and the leverage they have with suppliers. Don't forget that state law presently bans chain liquor stores; you can only own one.

Whether maintaining mom and pop shops is a legitimate reason to maintain the status quo is another question. But I don't see how you can possibly say this won't harm those shops.

Did the rise of pharmacies in supermarkets affect independent drug stores (not sure if you remember those)? Did the rise of bakeries in supermarkets affect independent bakeries? As Sarah Palin would say, You Betcha! Again, whether this is good or not for the consumer is another matter. But it did have a big effect on small business.

semi234 said...

For record, the state I was referring to was Massachuesetts.

Your "(one doesn't) see to many independent bookstores w/n eyesight of B&N (or Wal-Mart)" premise is horriblely simplistic & assumes way to many facts not in evidence.

For starters, how is a company like Rays Supply able to thrive when they sell the exact same product as their (literally) next door neighbor Wal-Mart? Rays prices sure aren't cheaper than Wally World, nor does the supplier bulk order come into play. Its because Rays is able to provide the TLC called customer service & more importantly product knowledge. They also have the flexibility of cutting a deal lower than the sticker price to make that sale. That's not something the corporate Wal-Mart has.

The example of the Old Corner Bookstore out in Boston's North End being right across the street from a 3-decker Borders is a different example. Old Corner is able to thrive because their market are used while Borders is new. The Brookline Booksmith competed against a Barnes & Nobles out in Coolidge Corners (in Boston) for close to 10 years until recently the BN closed shop. Brookline had, I thought, an interesting marketing strategy. On the street level, they had new books but they also had a used book cellar. You could take you finished books there to sell them back, you could get 15% in cash or 20% store credit, basically giving the customer an incentive to buy more product.

When Amazon arose in the late 1990's everyone proclaimed that it would be the demise & the brick & mortar store, that never materialized. It simply revolutionized the business model &, I feel, swung its favor to the Mom & Pop stores. Nor longer were they limited to the local markets.

People also care about a company's mission statement. If its something that matters to them, they're more apt to spend their dollars there. How else do you explain establishments like Trader Joe's markets (big on organic foods & fair trade) or the Housing Works bookstores (social issues).

Furthermore, I think your independent pharmacies analogy is flawed. They weren't offering anything that the customer couldn't get anywhere else or closer to their homes. Its the same w/ photo processing & developing (remember those). Those Mom & Pop shops who's bulk business was that & not well diversified perished the moment people could process & print the pictures themselves. It simply cut out the middle man.

Independent bakeries are fewer but at the same time still plentiful. Holly King's parents own one in Cambridge. Same w/ Matt more locally. The difference between the supermarkets is that they focus on pumping out a superb product. Word of mouth counts for something in retail. To a lesser extent, the Sub Shop on South & 3rd is the same way. Because they have a proven track record of quality food, people from as far away from Moreau come there to get their subs bypassing local chain establishments like Subway or Quiznos.

Focusing back more on the liquor issue...

I honest to goodness believe that selling wine in supermarkets will a neglible effect on the Mom & Pop stores for the reasons already stated. Think about it, people will take the path of least resistance. If a bottle of wine is already in the stores, they're more apt to buy the food accessories that go w/ it. But many of us (myself included), just won't bother if we have to drive next door to the liquor store to buy what is essentially an impulse item anyway.

Brian said...

For the record, I never said the plan would destroy all mom and pop liquor stores. But it's quite clear that it WILL have a big effect. Because of, as you yourself put it: the path of least resistance.

There is a fundamental difference between liquor and subs. Bill on 3rd St. creates his subs by hand. His ham sub is a different product than Subway's ham sub or Stewart's. Ditto Matt's bread vs Wonder Bread. By contrast, a 32 oz. bottle of White Tail Merlot is identical wherever you get it.

As for books, there no doubt is a market for both independent bookstores and megachains in the academia-saturated Boston area and other big cities. But there's a reason people got so upset when a Borders was mulled for GF because they knew it would drive Red Fox and Dog Ate My Homework out of business. Amazon and big chains HAVE had a big impact on brick-and-mortar stores. The number of independent booksellers has gone down over 37% in the last 18 years.

But again, my original point is not that whether this is good or bad. My point is that it's outrageous to claim that the change would HELP mom and pop wine stores. There's no reason to believe the change won't negatively affect such stores. And even if the change magically suspends human nature and has no negative impact at all, that's still not HELPING such stores as the campaign deceitfully claims.

semi234 said...

Your "independent bookstores are down 37% in the last 18 years" again assumes facts not in evidence.

It doesn't even attempt to look at the market they're in, how they operated, the demogaphics they catered to, what kind of books they were selling, the economic climate in general, the mentality of the locals, & whether the business in question would have folded anyways.

I also think your Borders arguement in GF uproar is also flawed. There they ran into a vocal populace who believed in Red Fox's local mission statement & local centric mentality. Not to mention the economic wave shifted from trying to garner a big box store to small niche centric shops. The political winds simply changed. Were they able to come in, not more than 2 or 3 years earlier than they did, they would have been embraced w/ open arms.

Brian said...

I don't feel like going round and round with you because I have no idea where you're going with this. So I'll try to bring it back to the original point of the entry.

It was not about consumers, supermarkets or wineries. It was about "mom and pop wine shops" (the lobby group's phrase). The other groups are of course relevant to the broader debate but not what I was dealing with in this specific entry.

The lobby group claims that allowing wine and liquor to be sold in supermarkets would BENEFIT "mom and pop wine shops."

That is the specific point I object to as being, to be incredibly charitable, completely implausible.

I think it's telling that although the lobby group claims the change would benefit "mom and pop wine shops," it does not present a single argument (compelling or otherwise) this completely implausible claim.

However, if you think the change would indeed benefit "mom and pop wine shops" as the lobby group claims (but doesn't back up), I'd be interested to hear your reasoning.

Brian said...

"it does not present a single argument (compelling or otherwise) this completely implausible claim."

Should be... does not present a single argument to back up this implausible claim.