For a liquor store chain to endure for more than 70 years in a competitive and restrictive market while welcoming its third generation of family managers, it must be doing something right. At Connecticut’s M&R Liquors, the “secret sauce” is the critical role its loyal team of employees has played to ensure its longevity. “I’m so proud of our staff,” says Neal Rounseville, vice president and second-generation owner. “They care about our stores and they care about our customers. In this business, service is key.”
The Hartford-area chain enjoys a storied past, yet it has no plans to rest on its laurels as it prepares for the future. M&R was founded in 1952 in Glastonbury, Connecticut by Rounseville’s parents, Marrion and Roy, the M and R in the company’s name. Over the course of the next two decades, as the bedroom communities surrounding the state’s capitol city grew, so did M&R, reaching a high of 14 stores by the mid 1970s. “My father had the insight of putting our stores on the right-hand side of the road,” Neal explains, making it easy for commuters to stop in on their way home from work. “Our stores have always been conveniently located.”
Neal’s earliest memories of the business date back to when he was learning how to write and helped out recording store inventory. He and his brother Gary, a Market Watch Leader, joined M&R in the ’70s, and learned the business from the ground up. The stores always placed an emphasis on product knowledge and first-class customer service as a tactic to stand out in a state where enforced price posting restricts retailers from selling below cost. For the Rounsevilles and many of their employees, visits to wine and spirits producing regions over the years armed them with the knowledge and insight to help the stores emerge as fine wine and spirits destinations.
With time, though, and changes to Connecticut’s licensing regulations, the senior Rounseville began to pare down M&R’s roster of stores. “My father looked at certain markets and found that there wasn’t as much opportunity there going forward as there was in other markets,” says Neal, noting that the sale of some of the stores allowed the family to invest in and expand others.
Today, M&R is comprised of six stores in the greater Hartford, Connecticut area, including its flagship in South Windsor and locations in Avon, Farmington, Glastonbury, Manchester, and Southington—all middle-income to affluent communities. Gary, who remains president, is retired from day-to-day operations, but each of the brothers now have their own children fully committed to the business. Neal’s son Kyle, a CPA, joined M&R four years ago, and oversees company finances, while Gary’s son Ian has worked at the chain for over a decade and oversees IT functions. While the Rounsevilles have defined positions, Neal explains, “we’re not big on titles. We like to say that if you pick up the phone, you take care of the problem.”
Wine-Driven Business
M&R boasts annual sales revenue of about $20 million. Wine is the chain’s biggest driver, accounting for 38% of sales, followed by spirits at 32%, beer at 25%, and miscellaneous items such as non-alcoholic beverages, glassware, and accessories, at 5%. The stores all range from 8,000 to 10,000 square feet in size.
The South Windsor store, which opened in 2008, is conveniently located off Interstate 91. Company offices and event space are housed on the second floor of the facility, above the spacious retail space. Upon entering the store, shoppers are greeted by a large, framed photo of Marrion and Roy in the vestibule, a tribute to the chain’s founders. Low shelving units and carpeted floors at the store—as well as at M&R’s other locations—convey the atmosphere of a fine wine shop, rather than a warehouse or discount store.
Spirits are positioned in the front of the store, including an entire aisle devoted to Bourbon and rye. Wine is located in the central part of the store, while the rear features a 22-door walk-in beer cooler. Another nine cooler doors for chilled wine and beer singles run along a side wall, across the store from a fine wine room housing bottles priced at or over $100. Additional features of the 10,000-square-foot store include a small but growing non-alcoholic beverages section, showcasing the likes of Fre white zinfandel ($9 a 750-ml.) and Athletic Run Wild IPA ($11 a 6-pack of 12-ounce cans). “It’s a one-stop department for customers looking for non-alcoholic beer, wine, and spirits,” Kyle says of the recently added section.
Another prized feature of the M&R stores is the custom-made wine shelves that not only drive sales of high-margin items but also have the ability to stock more product than standard wine shelves. The units feature four deep shelves allowing for vertical storage of bottles, along with a unique laydown shelf positioned at eye level, designed to merchandise profitable wines for quick sales.
Upselling Customers
M&R stocks nearly 3,800 wine SKUs, priced from $5 a 750-ml. for Boone’s Farm Sangria to $440 for the 2009 Château Cos-d’Estournel-St. Estèphe. Top-selling wines include Josh Cellars Cabernet Sauvignon ($15), Kendall-Jackson Vintner’s Reserve Chardonnay ($13), Kim Crawford Sauvignon Blanc ($15), and Cavit Pinot Grigio ($13 a 1.5-liter). While wine sales at the chain have been fairly stagnant of late, Neal notes that “the consumer is trading up to fine wines, and that’s a plus for us as we have a reputation for being a fine wine store.” Kyle adds that demand is strong for California wine, especially Cabernet. “We can’t get enough of it,” he says. Similarly, sparkling wines remain in demand despite difficulties sourcing Champagne.
The sales staff at M&R encourage customers to try different wines. “We’re always bringing in new things, such as new Burgundies, new Bordeaux, Rhônes, and wines from Spain,” remarks Kyle. “We hope that if a customer comes in for a California Cab, we can get that add-on sale by saying, ‘if you like that, you’ll really like this one.’” The stores’ “M&R Direct” wines—including selections sourced through the Wine & Spirits Guild, of which the chain has been a long-time member—have helped build their reputation for good wine finds. “Everything we market as direct we taste, so we stand behind those products,” explains Neal.
Spirits sales at M&R, meanwhile, are on the rise, according to Kyle, although RTDs like High Noon ($28 a 12-pack of 12-ounce cans)—which can only be sold in liquor stores in Connecticut—are one of the big drivers these days. Bourbon and Tequila are also performing well, he adds. Neal points to the emergence of Bourbon enthusiasts as key to the growing popularity of the whiskey. “The interesting thing about Bourbon now compared to years ago is that consumers have several open bottles at home, not just one,” he remarks, a trend that has helped build sales at retail. M&R partners with distillers on its own barrel picks—at least a half dozen a year—such as the recent Maker’s Mark Private Selection 1st Round KO ($75 a 750-ml.). In total, M&R stocks 2,600 spirits SKUs, ranging from Majorska vodka ($9) to Glenlivet 25-year-old ($600). Top selling brands include Tito’s vodka ($32 a 1.75-liter), Ketel One vodka ($35), and Smirnoff vodka ($20).
Craft beer remains an important segment at M&R. “We have a nice craft beer culture in this market,” says Kyle, “although the velocity has slowed down as consumers move away from high abv beers toward lighter, more sessionable brews.” Similarly, the excitement behind hard seltzers isn’t what it once was, the retailer notes, “but new entries like Hard MTN Dew ($18 a 12-pack of 12-ounce cans) are helping to keep the category fresh.” The chain stocks about 1,800 beer SKUs, priced from $6 a 6-pack of 12-ounce cans of Busch to $33 a 4-pack of 12-ounce bottles of Dogfish Head 120 Minute IPA.
Family Business
M&R employs about 65 people, including several who have been with the chain for 30 years or more. “Many of our long-term employees have traveled to nearly every major wine region,” notes Neal. “Our goal has always been to have a well-traveled staff, and we encourage those who are interested to travel to a new wine region every couple of years.” Perks like that have gone a long way in building loyalty. “When we say this is a family business, we’re not just talking about the Rounsevilles,” Neal remarks. “Our whole team is a family.”
But Neal and his son express concern about that type of loyalty among new retail workers, noting it may be a rarity. Like other retailers, they point to labor constraints as one of their greatest challenges. Growing competition is also a worry as the state’s grocers continue to lobby for the right to sell wine in their stores. “I think it’s going to happen,” says Kyle, pointing to similar developments in other states. “And when it does, it will be important for us to pivot.”
Indeed, M&R is already preparing for a future that looks much different. Plans include a bigger emphasis on digital marketing and sales. Noting that the company already utilizes email blasts and Facebook to engage with customers, Kyle says, “We’re planning to have more of a presence on social media as that’s where the market is headed.” Expanded e-commerce is also an opportunity. While M&R already ships wine to consumers in states where the products aren’t available, “we’re looking to see if we can grow that side of the business,” he says. Neal adds that the company is also looking at additional locations, and they may be located outside of Connecticut.
But one thing will never change, the Rounsevilles vow. “We’ll continue to invest in and educate our staff,” Neal says, including new team members who show an interest in the business. “We know we wouldn’t be here today if we didn’t take this approach.”