2020 Proves Bittersweet For Retail Tier

Under heavy pressure in a most difficult year, retailers quickly adapted to overcome challenges.

Wally's Wine and Spirits (Beverly hills wine room pictured) faced major challenges at the onset of Covid-19, as half of the company's business is on-premise. Wally's two stores quickly switched gears to re-emphasize on just the retail aspect of the business.
Wally's Wine and Spirits (Beverly hills wine room pictured) faced major challenges at the onset of Covid-19, as half of the company's business is on-premise. Wally's two stores quickly switched gears to re-emphasize on just the retail aspect of the business. (Photo by Andrea D'Agosto)

Surging wine, spirits, and beer sales have made 2020 a stellar year for many beverage alcohol retailers. The experience, however, is bittersweet, with serious mixed emotions under the rising second wave of Covid-19. “It’s hard to celebrate,” says Mark O’Callaghan, owner of Exit 9 Wine & Liquor Warehouse in Halfmoon, New York. “I have a lot of friends who are restaurateurs and it’s horrific.”

In Los Angeles, Wally’s Wines & Spirits has experienced a 300% increase in online sales this year and overall retail sales are up, but 50% of the company’s business is on-premise. “Our retail sales are good, but our model is slightly different in the sense that half of our business is now gone,” says Wally’s president and principal Christian Navarro. “Style points and building brands are less important now than they were before. Now it’s about turning numbers and paying the rent.”

On a positive note, retail sales during the holiday season this year at Wally’s got off to a fast with a 40% surge in dollar sales. “Those are good signs,” Navarro says. “People are shopping earlier because they’re not in the office grinding.”

For retailers such as Exit 9 Wine & Liquor Warehouse (owner Mark O'Callaghan pictured) near Albany, New York, the biggest challenges came in continuously adapting to new state and federal regulations.
For retailers such as Exit 9 Wine & Liquor Warehouse (owner Mark O'Callaghan pictured) near Albany, New York, the biggest challenges came in continuously adapting to new state and federal regulations. (Photo by Dan Bigelow)

Changing Dynamics

Responsible for filling the sales void created when restaurants were forced to close, retailers became an essential game changer to clear hurdles and meet demand. Retailers will remember this year for double-digit sales growth, supply issues, increased online orders, curbside pick-up, home deliveries, and consumers trading down and buying in bulk. “Our biggest challenges this year are employee retention, keeping the store clean and safe, and managing the labor intensity of curbside pick-up,” Exit 9’s O’Callaghan says.

In North Dakota, Happy Harry’s Bottle Shops has focused this year on staff training and safety as employees dealt with products being out of stock and rapidly changing consumer buying patterns. Overall sales at Happy Harry’s are estimated to increase 13% this year, led by Barefoot ($5 a 750-ml.), Windsor Canadian whiskey ($14 a 1.75-liter), and Busch Light ($19 a 30-pack of 12-ounce cans). “There was such a rapid shift in how consumers changed their shopping patterns,” says CEO Dustin Mitzel. “It will take years for some things to get back into relative normalcy, and other things will forever be changed.”

At Happy Harry's Bottle Shops (pictured) in North Dakota, consumers turned to trusted brands during their shopping sprees during Covid-19.
At Happy Harry's Bottle Shops (pictured) in North Dakota, consumers turned to trusted brands during their shopping sprees during Covid-19.

Pent Up Demand

In April and May, Exit 9 was doing 200-300 curbside pick-ups a day, and this holiday season it’s about 125-150 a day. Pre-pandemic, on the other hand, saw just five a day. Overall sales at Exit 9 are estimated to increase 26% this year, fueled by top-selling brands Josh Cellars Cabernet Sauvignon ($11 a 750-ml.), Tito’s vodka ($30 a 1.75-liter), and Bota Box ($18 a 3-liter box). “These are big national brands,” O’Callaghan says. “People gravitate to what they know, especially when shopping online.”

Beverage alcohol retailers navigated through chaos to keep the industry pipeline moving. “Online sales and curbside pick-up are not going to change,” O’Callaghan says. “Customers are going to keep working from home and consumption is going to be there.”

Looking ahead to life after the pandemic, Navarro of Wally’s anticipates mass celebrations. “As the vaccine is available and the markets open up again, it’s going to be like the roaring ’20s,” he says. “People are going to go wild because there’s a pent up demand to go out and hang out with friends.”