By Emily Le Coz / NEMS Daily Journal
TUPELO – Andy Graf awoke the morning of Dec. 29 to discover his newest business competitor, Oscar’s Fine Wine & Spirits, advertising champagne at 20 percent off.
Within about an hour, Graf had reprogrammed the digital sign outside his La Vino Wine & Spirits with an even better deal: champagne at 25 percent off.
This came just days after an already intense pre-Christmas battle for customers between La Vino and Oscar’s, which had opened in October in the Crye-Leike Plaza – directly across North Gloster Street from La Vino.
Customers, meanwhile, happily bounced back and forth across the road to scoop up deals from both stores.
But it’s not a friendly competition. At least not for Graf, who said he considers Oscar’s emergence into an already saturated market a personal affront. And he’s prepared to fight for every last customer, even if it means slashing his profit margins for a while.
“Hell yeah, I’m going to fight,” Graf said. “There are 25,000 people moving up and down the street each day. If one liquor store is there, or if 10 liquor stores are there, the number of people doesn’t change.”
The Mississippi Department of Transportation’s latest traffic count shows about 24,000 vehicles traveling that stretch of North Gloster daily.
J. Oscar Connell Jr., who owns Oscar’s, denied any personal ill will toward Graf. He said it made good business sense to tap into the Tupelo wine and liquor market and that the new Crye-Leike Plaza is an ideal location.
“There’s $14 million worth of liquor being sold in Lee County alone,” Connell said. “Competition is healthy in anything. I’m here to have a successful business and see that my customers have the best price they can possibly get.”
Lee County ranks sixth statewide in liquor sales, with $14.3 million last year rung up in bars, restaurants and package stores, according to the Mississippi Department of Revenue.
Sixty-five businesses in the county have active liquor permits, and two dozen of them – including 15 in Tupelo alone – are package stores.
Unlike some other states, Mississippi doesn’t limit the number of liquor permits it issues. As long as businesses comply with the legal requirements mandated by the Department of Revenue’s Alcoholic Beverage Control Division, they get a permit, said the department’s spokeswoman, Kathy Waterbury.
Filling a niche
La Vino opened in late 2005, occupying the site of a former restaurant. It wanted to tap into what it considered an underserved market, luring Memphis-bound wine lovers who found little variety in Northeast Mississippi.
Less than six years later, La Vino is Mississippi’s third-largest retailer in terms of its per-case purchase volume from the state warehouse. In 2010, the store bought 17,265 cases of wine and 12,708 cases of liquor from the ABC, according to Waterbury.
No other Northeast Mississippi retailer even comes close to that volume.
“If you had told me 10 years ago there’d be a top 10 store in Tupelo, I’d have told you you’re crazy,” said Robbie Shackelford, a liquor sales representative for Republic National Distributing Co. “He’s a hell of a good businessman.”
When Graf first opened, his main competition came from Northside Package Store and Rebel Package Store, both located on North Gloster within a mile of La Vino. Now both stores are closed, and their previous owners currently work for Graf.
Northside shut its doors about two years ago; Rebel followed suit in May.
Graf said the buyouts were amicable and voluntary. But others claim it was a calculated business decision to capitalize on the area’s limited market share.
“He is trying to put everybody out of business,” said Barbara Giacometti, who owns Wines Etc. with her husband, Alfredo. She said she thinks Graf also wants to buy her 18-year-old store, “a successful little business” located near Kroger on Barnes Crossing Road.
Graf denied this, saying he thought Giacometti wanted to sell the store and simply directed another potential buyer her way.
Other package store owners contacted by the Daily Journal said Graf has made no attempt to purchase their businesses.
But Connell said the loss of Northside and Rebel worried him. If other retailers also disappeared, he said, it would allow the remaining giant – or giants – to control the prices.
“Our intention at Oscar’s Fine Wine amp& Spirits,” he said, “is to prevent the extermination of the small liquor store in Northeast Mississippi so that there is competition, and we believe that’s healthy for the whole market.”
War of the roses
Graf agreed competition is healthy, but he said that’s not the case between Oscar’s and La Vino. Instead, he believes it’s a personal attack against his livelihood fueled in part by a former business partner who’s now helping fund Oscar’s.
Oscar’s filing with the Secretary of State’s Office lists its only owner as Connell, but Graf said the store has at least one silent partner – his former business associate.
Connell declined to confirm that.
Also on Oscar’s team is a former employee of Rebel Package Store, Bob Smith.
Smith, the business manager, said he got a job offer from Connell after Rebel closed and jumped at the chance to run another package store. His decision to work for the competition wasn’t mean-spirited, he said. It was just a good job offer.
Then came Oscar’s post-Thankgiving Day ads in the Daily Journal, the ones that said: “There are a lot of grouches on Gloster, but only one Oscar.”
Since the closures of Northside and Rebel, La Vino is the other only liquor and wine retailer on Gloster besides Oscar’s. Graf said the ads were an attack directly targeting him.
Smith denied this, saying Oscar’s just placed fun, Christmas-theme ads meant to grab people’s attention.
Grab attention it did. Connell said the ads drew hordes of customers to Oscar’s, customers who previously shopped at La Vino. Graf admitted feeling the pinch, but said he’s fighting back.
“I’m not going to give anything up,” he said. “But because of it, we escalated into a price war. It’s great for the customers – what’s not to love? But it puts excess pressure on smaller liquor stores.”
That’s because smaller retailers don’t move enough volume to drop their prices as low as Oscar’s and La Vino.
Other package stores contacted by the Daily Journal said they either haven’t felt the pinch or have seen only minimal effect.
And Giacometti said the situation actually seems to be helping Wines Etc.
“The war between the roses over there is bringing us extra business,” she said, “because people don’t want to be in the middle of that.”
Rock ‘n’ roll
It’s unclear when the war will end. Maybe never, according to Connell, who said he doesn’t consider this a war at all. He set his prices low upon opening his store and said he hasn’t budged on them yet, nor does he intend to.
Graf also plans to stick with it awhile. He recently affixed a bright yellow arrow to his store sign telling those 24,000 daily motorists that he’ll “beat anybody’s price.”
There’s little question about who the “anybody” is.
“I wish them both the best,” Shackelford said. “There’s always room for other liquor stores, but I don’t think Oscar’s being across the street is going to take business from La Vino. He’s been there six years, and he’s got his regular customers, and he’s financially able to buy every case of liquor in the state just to keep anybody else from getting it.
“It’s rocking and rolling.”
Contact Emily Le Coz at (662) 678-1588 or email@example.com.
For your information
– Lee County ranks sixth statewide in liquor
sales and collections.
County No. Sales & Permits Collections
1. Hinds 171 $47.5 million
2. Harrison 212 $33.5 million
3. Madison 104 $21.5 million
4. DeSoto 96 $19.8 million
5. Jackson 128 $15.5 million
6. Lee 65 $14.3 million
7. Forrest 76 $10.9 million
8. Lafayette 70 $9.6 million
9. Oktibbeha 40 $7.3 million
10. Washington 40 $7.1 million
Source: Mississippi Department