Alcohol sales usually go up in down times

Popular opinion holds that during tough economic times, the alcohol industry fares better than others as people look for ways to cope with hardships.
During this recession, that’s holding true statewide, but retailers in Northeast Mississippi say it’s not the situation here.
Liquor and wine sales statewide are up almost $524,000 for the first eight months of 2009 compared to this time last year, according to Kathy Waterbury, spokeswoman for the Mississippi State Tax Commission, which sells and regulates alcohol through its Office of Alcoholic Beverage Control.
The ABC is the state’s wine and liquor wholesaler for retailers.
Case sales of liquor, such as whiskey and vodka, are up 2.1 percent compared to 2008. Wine is up 1.4 percent.
The numbers don’t jibe with sales in Northeast Mississippi, say a sampling of retailers.
“I just don’t understand how they think they are up,” said Andy Nash, owner of Rebel Liquor and Wine in Tupelo. “I’m not by any means going out of business, but it’s just like everything else in the mom-and-pop industry. People have got to get out and spend money.”
The current recession, which economists say began in December 2007, has caused many people to rethink their notions about so-called recession-proof industries.
Nash, who has owned the 46-year-old store for 16 years, used to get daily deliveries. Lately, because of weakened demand, deliveries have been trimmed to three times a week.
At La Vino, also in Tupelo, owner Andy Graf said his business isn’t seeing any increase either.
“I wish I could tell you, ‘Yes, we are blowing and going,’ but I would have to lie to myself,” Graf said.
It’s the same story in Oxford.
“Sales aren’t down but they aren’t really up,” said A.J. Kiamie, general manager of Oxford’s Kiamie Package Store, which has been open since 1966.
Graf added that while an increase of more than $500,000 sounds impressive, it’s not that much when it’s spread out across all the retailers in the state.
According to Waterbury, more than 1,560 retailers had permits to sell wine and liquor in the state last year.
The sales increase means each business has gained about $335 per business.
The commission does not break down the sales beyond the state level so comparisons between Northeast Mississippi and other regions are not available.

Trading down
Another statewide trend – customers trading down with their liquor and wine purchases – does appear to ring true in Northeast Mississippi.
Graf said that while the customer count is the same at 4-year-old La Vino, the average ticket is down.
Customers who used to buy top-shelf Grey Goose are getting another vodka at half the price, Graf said. They also are getting cheaper bottles of wine.
Kiamie said people who used to buy a $40 or $50 bottle at his store now are buying $10 to $15 bottles.
At Rebel, Nash points to the shelves as an indication of what’s selling. The top shelves, with the higher end products, are fully stocked, while the middle shelves, with lower-priced items, have several holes the day before getting restocked.
He’s also sold twice as many of the lower-priced pint-size liquor bottles than he did this time last year. As for wine, Nash said his customers are opting for $7 bottles these days instead of the $20 bottles that used to fly off the shelves.
The retailers’ orders to ABC reflect the changing customer habits. Waterbury said more “reasonably priced” liquor and wine items are taking over the top 10 list for the ABC’s best-selling products, while high-end items are losing their top rankings or falling off the chart completely.

Capitalizing on at-home diners
Restaurants have been squeezed by the recession, too, as more diners are saving money by eating and drinking at home.
Nash, who wholesales to about 20 restaurants in town, said orders from restaurants are about half of what they normally are.
The bittersweet upside, he said, is he is seeing “people I haven’t seen in years and lots of new people.” He knows they are entertaining at home because they get three or four types of wine, citing the tastes of different attendees.
Graf also said he’s picking up some business as people choose to dine at home.
“There’s just not enough disposable income to go out and eat as we used to have two years ago,” Graf said. “The restaurants have been hit the hardest.”
Kiamie said he’s seen new customers, too. But because Oxford is a college town, he thinks the restaurant situation there is different from Tupelo’s. He said his wholesale business is up, citing the excitement surrounding Ole Miss’ football team.
The more the team wins, Kiamie said, the better his sales are. Nash said the same rings true with his retail sales in Tupelo when Mississippi State and Ole Miss win.
But in Oxford, the better the Rebels do, the more alumni want to travel to Oxford and see the home games. While they are in town, they go out to eat and usually have a few drinks.
Yet even without the games, Kiamie said wholesale and retail alcohol sales benefit from Ole Miss’ student population, which has been recognized nationally over the years as a hard-drinking bunch.
“The kids always have disposable income,” said Kiamie, who is an Ole Miss grad. “They are going to drink no matter what.”
While wine sales continue to truck along at Rebel, Nash said his liquor sales have taken a hit.
“I think some people have just altogether quit drinking liquor,” he said. “I lay awake at night sometimes just wondering what’s going on out there.”
While his wine customers are predominantly women, his liquor customer base is mostly men. He suspects they are downgrading their choices even more than the women, who are opting for cheaper bottles of wine.
“Men can stop buying liquor and drink beer,” he said. “A guy will get a 12-pack of Miller Light for $9 instead of getting a $20 bottle of Jack Daniels. It’s all about the money, I think.”

Contact Carlie Kollath at (662) 678-1598 or carlie.kollath@djournal.com.

Carlie Kollath/NEMS Daily Journal