How's Business?

With the economic headlines posting daily, The Gourmet Retailer would like to get perspective from retail members/manufacturers as to what business strategies you've adopted to deal with the present economy. Please share what you have, we'll be writing a story in an upcoming issue about how to exceed in a challenging economic time.

Obama and Organic

I think the Obamas will be good for specialty retailing.  The president is into natural foods and that will surely get lots of attention in the next few years and could translate into heightened interest in the natural and organic categories.  The first couple is a sophisticated reflection of modernity with two career parents and busy schedules- and the public will take notice of how they raise their family, what they eat and where they go on vacation.  Michelle Obama’s fashion sense and decorating has captured the attention of everyone… and her wardrobe is "hot couture" and flies off the shelves at whatever retailer gets credit for what she wears.

 

You’ll see all sorts of puff pieces about the first family and food is going to enter into the picture once they settle into the White House.  From the first state dinner to breakfast we will see what they eat and why it was selected, the wines they prefer, to the desserts and snacks they love. The new first couple are outgoing and plan to open up the White House for events, food, and entertaining which are sure to draw attention.  Michelle Obama plans to have picnics on the south lawn--- I wonder what’s on the menu?

 

Ron Jakubisin

Changing Strategies

I am so glad 2008 is over. I am ready for 2009. Actually, I am ready for 2010, which is when I think we’ll all be taking a deep breath, looking back, and celebrating our innovation and survival. But in the meantime, we’ve got 2009 to face and there will be much to celebrate and note this year: a historic inauguration as President-elect Barack Obama is sworn in Jan. 20; the potential and predicted closing of retail locations across the country; and more foreclosures and failures.

And yet I am hopeful.

I hope you are hopeful, too. I’ve felt for months that while retail numbers are down and all industries are going to have to adapt and rethink their business plans, consumers are still shopping and good things will happen.

During the fourth quarter, we posed a series of questions to our Retailer Advisory Board and the industry at large about their own economic outlook. Looks like my notso-dismal outlook on our market has some validity — the majority of specialty retailers responding said third-quarter sales were either the same or higher than last year’s numbers. Still, notations that sales were down and there were fewer customers were evident, and nearly 60 percent of respondents believed their fourth-quarter sales were below the previous year. To boost those numbers, retailers planned to offer pricing specials (discounts, coupons, etc.) on traditional holiday items and increase local marketing (direct mail, radio, cable TV); more than 55 percent said they would add new products and merchandise to build holiday sales.

One retailer, at year’s end, told me that the year (2008) wound up better than he had feared it might, but not as good as he had hoped it would. “The numbers were a little lower than last year. We had a very interesting December. The first week was very slow. The second was about normal. The third week was crazy-busy! And the week after Christmas was unusually quiet with more than usual returns. We are down about 16 percent for December, but only about 12 percent for the year. We’re not at all unhappy with those results, this year.”

These retailers have already adapted to become more efficient in these changing economic times. They are focused on success, on beating down the media reports of failure and forging ahead.

All the specialty retailers responding to the survey said their focus is the customer — just as recommended by a report prepared by CFO Research Services in collaboration with American Express, entitled No Stone Unturned: Strategies For Cash Management In Hard Times. The report states that when asked about growth strategies in the face of a challenging credit market, nearly threequarters of executives who responded to the question — including many from “no-growth” as well as “growth” companies — say they will pay more attention to the customer. These CFOs noted they would focus on “organic growth through improved customer relations” and “on our core business, leveraging existing relationships.”

Seems this business plan is no surprise to specialty independents — they’ve always put the customer first. The customer is the core of the specialty gourmet market. Specialty gourmet consumers are innovative, a step ahead and always in search of new; they rely on the specialty independent gourmet retailer to fulfill their desires. And while their expenditures may be more conservative in the year to come, they will still have desires.

So what can vendors do to assist these retailers who are buckled down and ready to compete in 2009? Survey responses ran the gamut from better packaging and display to free shipping and discounts on lower minimums. Mainly, retailers said they need price breaks and specials, as well as creative sampling programs and demo allowances. 2009 is the year when every industry will have to get back to basics — taking costs out, running lean and efficiently, optimizing working capital, and overall keeping closer tabs on financial performance. And with these changes there will be growth, as entrepreneurs adapt a new model for
success in the retail world and beyond; there will be reasons to celebrate this New Year. We’re focused on helping our readers — retailers and vendors alike — achieve these goals and succeed. We will be producing new ways of communicating, with online blogs and face-to-face events, as well as venues for vendors to introduce new products to retailers in just moments. We’re adapting along with you, our customers, our focus.

Cheers!
Michelle Moran
Editor-in-Chief
mmoran@gourmetretailer.com

Daily Entertainment Adds to Sales

Last fall, we noticed that in our retail store, peak traffic days when we had events scheduled often had increases from the year before, while days when we had no special activity scheduled were often down.  So, for the months of November and December, we made up a monthly calendar with an activity or special promotion for every day.  We distributed these monthly activity calendars to each customer as they arrived at the store, and mentioned many of them in our weekly email to our frequent buyer customers.  Although not every idea was a success, we did find increased customer interest and increased sales around many of the one-day promotions.  Our success with the ideas in December has caused us to make similar plans for the first quarter of 2009. 

We start with our planned promotions for the month, and coordinate them with the Gourmet Retailer promotion calendar for that month that is published in the magazine.  We then add a couple of in-store demonstrations and other local events that will interest customers.  We fill in with special sales on certain seasonal merchandise categories.  When we have a calendar complete, we fold it into a brochure and give it to salespersons to hand to customers who come in.  For December, our most popular promotion involved having customers try to fit their item into a Christmas stocking.  If it fit, it was 20% off.  Our January promotions include Elvis Presley's birthday, where customers get 20% off anything that rocks or rolls. 

Customers appreciate a sense of humor, and if that can be combined with saving money on a category of merchandise, it may just help sales during this normally slower season of the year.

Countdown to NASFT Show

With the Winter Fancy Food Show in mind, a couple of weeks ago I shared a few of my favorite foods--dishes that can be found in low-key restaurants around San Francisco. I was hungry for Bay Area eats then, and after reading the San Francisco Chronicle Food Critic Michael Bauer's Top 10 restaurants of 2008, I'm positively ravenous. In case you missed it on sfgate.com, here's a recap of Bauer's picks:

Yoshi's: 1330 Fillmore St., San Francisco; (415) 655-5600

"Chef Shotaro 'Sho' Kamio has turned this into one of the most exciting modern Japanese restaurants in the city." Smoky cedar paper-wrapped vegetables anyone?

Flora: 1900 Telegraph Ave., Oakland; (510) 286-0100

"The restaurant, located in an historic Art Deco building, feels like a classic bar and grill, with checkered linoleum floor and a period-piece bar." This Oakland eatery features a California-inspired menu that includes chicken pot pie, steak and pork chops.

 

609 Hayes St., San Francisco; (415) 621-5482

"Jessica Boncutter, who has cooked at Zuni and Hog Island Oyster Co., has created a cultlike following at her restaurant in HayesValley. There is no printed menu; instead, each night the menu is written on the blackboards arranged in the cramped 38-seat space." There’s always a vegetarian option.

 

4 Mint Plaza, San Francisco; (415) 546-4134

The California-Provencal food here, says Bauer is "rooted in familiarity with a flair of creativity."

Beretta: , San Francisco; (415) 695-1199

"You can't go wrong with pizza and cocktails," says Bauer. The pizza with potatoes, rosemary, radicchio and Gorgonzola dolce sounds particularly divine.

Murray Circle: 601 Murray Circle, Sausalito; (415) 339-4750

"The restaurant, set in what used to be the enlisted barracks at Fort Baker, looks over the former parade ground that stretches out in front of a series of cream-colored buildings with red tile roofs. Chef Joseph Humphrey, who earned rave reviews at Meadowood in St. Helena, crafts a beautiful a la carte menu, but his talent really shines on the grand tasting menu, a bargain at $85."

3917 Grand Ave., Oakland; (510) 547-5035

"Few restaurants have as a pure a sensibility as Russell Moore's Oakland restaurant that builds a cuisine around local products and fire."

Corso: 1788 Shattuck Ave., Berkeley; (510) 704-8004

Corso feels like the kind of trattoria you might find in Florence. It has a rustic, authentic vibe, even if the kitchen takes some California license with the menu."

Moss Room: 55 Music Concourse Drive, San Francisco; (415) 876-6121

"Loretta Keller and Charles Phan teamed up to provide the food at the new California Academy of Sciences building in Golden Gate Park. The Moss Room is Keller's domain, and she's created a lusty Mediterranean menu that warms up the subterranean space."

Nettie's Crab Shack: 2032 Union St., San Francisco; (415) 409-0300

"Each Sunday, Nettie's has a $38 crab feed where diners tackle the crab from scratch.

During the week there are also lots of great things to recommend, including clam chowder, buckets of clams and mussels, and an excellent hamburger."

A Timeline for '09: Preparing a Calendar for Your Wine or Liquor Store

"In business or in football, it takes a lot of unspectacular preparation to produce spectacular results."
-- Roger Staubach, Hall of Fame Football Player

 

The holidays creep up on us. Weren't we just eating turkey and cranberry sandwiches from Thanksgiving leftovers? How is it possible that the New Year has come and gone so fast? Is Valentine’s Day really just around the corner? In the retail industry, the holidays seem to come even quicker, causing quite a stir with our suppliers when we make last-minute demands for more New Year’s sparkling wine… which we should have ordered before we were baking our holiday treats for the neighbors.

Avoiding these last-minute panics is easy: plan ahead. In the first week of 2009, create a list of what you will need to order in the next twelve months. Answer these questions to help guide you:

-          What sold really well last year?

-          What time of year did these items sell?

-          Do you remember saying, “Next year, I’ll…” at any time in 2009? Why?

-          Are there any season or holiday-inspired products that you want to carry this year? (There are many great wine accessories that wine stores should carry around the holidays.)

After you have answered these questions, you will be able to compile a small list of what you should order, and what time of year these things should be ordered. As a supplement, I have also included a little calendar:

January

Chances are, the holidays depleted your Cabernet and sparkling wine sections. Now is the time to restock your best sellers. Concentrate on the heavier reds as well, since the weather is still cold, and people tend to drink the weightier varietals.

Wine Spectator’s Top 100 List just recently came out, and those in the wine industry know the effect that this publication has on the industry. In the sheer name of supply and demand, grab yourself a copy of the Top 100 issue and if you don’t already have the top 10 wines in your store, attempt to get them. At this time, it might be impossible to find a Casa Lapostelle Clos Apalta at a reasonable price, but recognize that this wine and its nine friends who made the Top Ten are hot items in the New Year.

The Super Bowl is coming up, so if you stock beers, now is the time to look into some interesting brews that could spice up a customer’s Super Bowl party. Stock up on some local breweries and make sure to hold a clearance sale on any holiday brews that you may have. They are inappropriate to keep on the shelves after January.

Valentine’s Day is coming up, so now is also the time to stock up on some reasonably priced reds. Valentine’s Day is an interesting holiday for wine business because it attracts those who might not normally drink wine. Many consider it a tradition to drink a red or a sparkling on the 14^th because it is the “romantic” thing to do, yet most of these consumers stick to other forms of alcohol during the rest of the year. Keep this in mind when ordering and when aiding your customers. Make sure to stock up on fruitier varietals, (some jammy Zinfandels or fruity, less peppery Shiraz, for example), so that your customers who don’t normally drink wine can find an approachable and very drinkable wine for their Valentine’s Day celebration. I suggest the Mollydooker Two Left Feet for those looking for a fruity yet big wine.

February

Make sure that you are stocked up on your reds and your sparklings, and take care to order some finer Champagnes as well. Valentine’s Day attracts those who do not normally drink wines, but it still caters to the wine drinkers who are looking to splurge on a bottle for their loved one.

Spring in just around the corner, so it is time to start asking your wine representatives to bring in some white wines to taste. At this time of year, your Sauvignon Blanc and Riesling sections are probably a little weak, and you will need to start building them up soon.

March

Spring is here! And your wine shelves should reflect this. Think Pinot Noir, Sauvignon Blancs, Gewurztraminers, and Pinot Grigios. This month, (and sometimes in April, depending on the year), customers will come in looking for wines to take to their Easter Brunch. Make sure you are ready to recommend a few wines that complement the brunch menus of your local restaurants.

April

As the weather continues to warm, you will probably see an increase in white wine sales and a slight decrease in the sale of your Cabernets and other heavy varietals. Now is the time to increase your selection of roses: a wine that I think gets little attention, but certainly deserves more. The French are masters of this wine, but California and Australia are making some impressive ones as well. Take time to stock this section and be ready to suggest them to your customers who readily drink crisp whites, but are looking to try something new.

Keep in mind that Wedding Season is beginning this month. If you haven’t done so already, attempt to build relationships with your local wedding and event planning companies. Offer them incentives: a free tasting for the bride and groom, set up by your wine buyer, with wines that reflect the tastes of the couple and complement the reception menu. Offer the wedding planner a case of wine if the bride and groom decide to purchase wines through your store. These sales require some planning in the beginning: you must coordinate a tasting, and invest a few bottles into the couple, but in the long run they could be purchasing many cases of wine from you.

If you decide to cater to the wedding crowd, make sure to include the “crowd pleasing” wines, and remind the bride and groom that they are choosing wines for an entire group, not just for themselves. Although it is impossible to choose wines which will cater to the palate of every guest, there are certainly some wines which are “safe” and aim to please. Lodi Zinfandels, Washington Rieslings, and Australians Shiraz seem to be some of the more drinkable wines. Stock up on these so that you will have plenty of cases for your bride and groom to order.

May

Wedding season is upon us. Make sure that you are stocked up on sparkling wines and a lot of Chardonnay: aside from Champagne, it seems to be the wine of choice for receptions. Continue stocking up your whites, and remember that Mothers and Fathers Days are just around the corner. These two holidays do for brunch what BLANK, so much like with Easter, stock up on whites and roses.

If you sell wine accessories, now is the time to purchase some nice wine glasses and decanters. They are excellent wedding gifts.

June – August

It’s been nothing but white wines in the day, reds for dinner at night, for months now. This is the lull of the season for most wine stores, where your daily excitement comes from the newest Sauvignon Blanc that has been released. Now is the time to educate your employees. Start researching what the growing conditions have been like this year, and predict how it will affect the grapes in various growing regions. Taste more wines. Hold more tastings for your customers, if you have a tasting room, and take a trip to a local winery to see what they offer.

Keep in mind, it’s STILL wedding season.

September

Fall brings a change in season, and a change in customer tastes as well. Most are not ready to dive back into Cabernets just yet, but they are looking for some Pinot Noirs or Burgundies to satisfy their desire for reds. Stock up on Pinots from up and down the West Coast: in California, the Santa Barbara, Santa Maria, Santa Lucia, Monterey, the Salinas Valley, Santa Cruz, Russian River, Carneros, and Mendocino Pinots are all extraordinary. I love Oregon Pinots as well, particularly those from Willamette, of course. I happen to love Ponzi, Ken Wright, and Beaux-Frères, but I have yet to meet an Oregon Pinot that I haven’t liked.

As a side note, the New Zealand Pinots are on the rise as well. Their Sauvignon Blancs have quite a following, so I have found that selling their reds is quite easy. They are delightful wines and add something special to the varietal which so many love.

October - December

It is time to stock up on the darker brews, and with the holidays coming, you should also start stocking up on the heavier reds. I happen to love the sparkling Shiraz and turkey combination, but make sure that your shelves are loaded with whatever you and your co-workers think are the perfect wines for a Thanksgiving meal.

Christmas is just around the corner as well, so it is time to start looking at wine accessories. Many customers stroll into wine stores in November and December looking to buy wines for their wine-loving friend or family member, but many are too intimidated to purchase a bottle, especially if they don’t know wine themselves. Wine accessories are the perfect gift for these individuals. Decanters, Vinturi aerators, wine bags, wine boxes, corkscrews and other tools (such as drip-stoppers) are excellent items to keep in your store, should your customers come in looking for something different.

Of course, with the holidays being so close, make sure that your shelves are filled to the brim with Champagne and sparkling wines.

 

Best wishes to your store and your employees in the New Year. May you find success throughout it.

 

Cheers!

 

Amanda

Did you know...

Prosecco sparkline wine comes from the Prosecco grape, a native of Italy. Prosecco can also be made into a still wine, a sparkline wine, (called Spumante), or a slightly sparkling wine (called Frizzante).

And they are delicious! And cheap!

Ask your wine representative if they have any other Proseccos to offer other than the traditional Spumantes that you often see in stores. Proseccors have quite a following, and many of those Prosecco fans would probably be willing to try a still Prosecco wine.

Word of the day

"puttony"

Originally the name for the basket used to gather Aszu grapes, the word transitioned into "puttonyos," which you may recognize from Tokay bottles. Puttonyos is the way which the sweetness of Tokay wines are measured. Wines can receive a measurement between 2 and 6 puttonyos, and the more puttonyos a wine is given, the sweeter it will be.

Invest some time into tasting these wonderful wines: I've always considered the Tokay wines to be hidden gems which few Americans know about. Keep in mind that a  good wine store should have Tokay wines of different puttonyos ("hint, hint" if you are the buyer at your wine store). Instead of having a tasting party, host a Tokay party this winter. Have you and your guests pair the Takays with desserts of varying levels of sweetness to find your personal perfect match, and don't be afraid to try them with rich food such as foie gras. When in a wine store, make sure to hold them up alongside one another as well: I've found that the more puttonyos a wine has, the darker it often is.

Happy tasting!

See Karen MacNeil's wonderful compilation of wine knowledge, The Wine Bible, for more information on Tokay... and anything else you'd ever need to know about wine!

The Retailing Climate is Better Than You Might Think

Dear Specialty Food & Kitchenware Marketer:

What would you do if you learned that, despite the dismal news about the current economic downturn and its effect on consumer spending, your independent specialty food and kitchenware retailer-customers' sales have not been as negatively affected? 

It is a fact, they haven’t!

Over the closing months of 2008, members of The Gourmet Retailer’s Retailer Advisory Board, other retailers interviewed for news stories and occasional retailer e-mails to our editors reported that store sales were performing better than expected — in some cases, beating the previous year’s results. So, with that in mind, we fielded a brief survey to the retailer subscribers of The Gourmet Retailer’s Dispatch newsletter to quantify if what we had heard anecdotally was proving true on average. And the news is really good.

• More than half reported same or better sales for the third quarter of 2008 (35% reported higher sales than same time last year).
• Just less than half (41%) reported that they expected fourth-quarter sales would be same or better than same period last year (respondents were surveyed in mid-December).
• The vast majority were undertaking pricing specials, increased local marketing and more in-store events to help bolster sales.
• More than half of responding retailers were adding new products/merchandise to help bolster store sales.
• Almost two-thirds (64%) reported that in-store sales were the greatest source of growth in the last six to 12 months.
(Survey questions and answers can be viewed in their entirety at the following link:TGR Survey Results

How could this be? Consider these three reasons:

Reason #1: Customers who shop in specialty food/kitchenware retailing stores are affluent, upper-middle-class consumers with average household incomes of $100,000/year. Related research shows this segment may be reducing their meals out-of-home (restaurant dining), but show no indication of lowering their spending on gourmet cooking — and, economically speaking, they don’t have too, either.

Reason #2: The majority of retailers responding to this survey were small independent retailers (cookware shops, gift gourmet shops, cooking schools & gift basket shops, specialty food stores, delicatessens, cheese shops, confection shops, wine shops) that have one or more stores, which constitute the majority of retailers serving this segment. These retailers have developed loyal customer bases that are more likely to reduce their spending with larger chain store operators than at the familiar smaller retailer that they often know by name and who is now a member of their community.

Reason #3: Independent retailers are more likely to have focused personal attention on shoppers, which is the cornerstone of good customer service. As a result, these retailers are highly tuned to their shoppers’ needs/tastes and market/merchandise their store offerings accordingly for better success than large, mainstream retailers.

What should you do with this information?

Well, we asked retailers in the survey what they thought you (suppliers) could do to help them, and they were pretty forthcoming: pricing specials; in-store marketing and merchandising programs; improved packaging and shelf displays; providing demos or increasing demo allowance; and free shipping were at the top of their lists. In other words, help them sell more of your products.

What about how retailers view your company’s advertising during these times?

Again, what you would hope to hear — the largest responses focused on the fact that your advertising serves to “remind them of the value your products and services deliver to their stores and their customers” if they already stock your products, but it also “creates interest in trialing new products in their stores” if they currently do not stock them.

So, fortunately, our retail segment is actually weathering the economic storm better than we had thought or hoped; and now, more than ever, you should be supporting their efforts.

Best Regards

Scott J. Seltz
Vice President – Publishing Director
The Gourmet Retailer
Nielsen Retail Food Group

Did you know...

The Gold Rush impacted every aspect of California culture, including the wine industry. Many gold seeking miners had little success in the hills of Northern California, but found true gold in the wine business. The 49ers also introduced Zinfandel to California, a grape which thrives in the Golden State.    

For more information, consult "Wine Heritage, The Story of Italian-American Vintners" by Dick Rosano and "Zinfandel: A History of a Grape and Its Wine"