For Stew Leonard Jr., the wheels are always turning when it comes to merchandising strategies. “We’re constantly looking out in the market for best practices, benchmarking ourselves against other retailers,” says the president and CEO of Stew Leonard’s Wines. This past spring, his team visited concepts like Binny’s Beverage Depot, Whole Foods and Mariano’s in Chicago to observe their beverage alcohol departments. “There are a lot of great retailers out there,” Leonard says.
As the operator of nine wine shops in Connecticut, New York and New Jersey, Leonard finds inspiration in other venues as well. During a recent meal at a restaurant in New York City, he noticed that the back bar featured rear lighting, illuminating the array of distilled spirits bottles. That tactic has been emulated at the Stew Leonard’s Wines store in Norwalk, Connecticut, where LED lights now highlight the shop’s premium vodka selection.
But Leonard doesn’t really need to travel any farther than across the street from the Norwalk wine shop to find true retail inspiration. There sits the original Stew Leonard’s Farm Fresh Foods—the gourmet supermarket founded by his father—which is known for fresh produce, meats and baked items, along with merchandising efforts that turn a mundane grocery-shopping trip into a fun-filled adventure. “We believe in having dramatic displays and using bold, simple signage,” Leonard explains. “Merchandising has to make customers say ‘wow’ when they walk in.” For the uncanny ability to blend simplicity with an impressive sales environment, Stew Leonard Jr. is the recipient of the 2015 Market Watch Leaders Alumni Award for “Best Merchandising.”
Grocery Roots
Founded as a dairy store about 45 years ago, Stew Leonard’s Farm Fresh Foods has grown into a regional chain of four grocery stores in Connecticut and New York, with a fifth location on Long Island set to open next year. The concept is regularly recognized for its commitment to customer service and its employees, as well as its approach to merchandising. Laid out like a maze, the Norwalk store entices shoppers with samples galore, animatronic characters and even an outdoor petting zoo.
In 1999, the company expanded into the beverage alcohol business with the opening of the first Stew Leonard’s Wines unit in Yonkers, New York, when Stew Leonard Jr. saw a need for a wine store focused on great customer service and product selection. Since then, outlets have been added in Norwalk, Danbury and Newington, Connecticut; Farmingdale and Carle Place, New York; and Clifton, Paramus and Springfield, New Jersey. The stores in Connecticut and New Jersey sell wine, spirits and beer, while the New York locations offer only wine and spirits. Some food items are also available in New Jersey.
Each wine store is independently owned and operated and isn’t part of a cooperative buying group or affiliated with the Stew Leonard’s grocery stores. Leonard, who was named a Market Watch Leader in 2010, reports that combined sales revenue for the nine wine shops—with an average size of about 10,000 square feet—is close to $100 million. Wine accounts for approximately 66 percent of sales at the stores, which employ about 200 workers, while spirits and beer each contribute 15 percent and miscellaneous items account for the remainder.
Stew Leonard’s Wines stores are warm and inviting, often featuring wood floors, soft lighting and dramatic oak ceiling fixtures reminiscent of wine racks. At the Norwalk store, wine lines two walls, with spirits and beer occupying a third, and seven cash registers stand at the front of the store. Shelving is purposely low, allowing consumers to easily locate product categories and view informational videos on a 92-inch screen. A tasting bar in the rear of the store features an Enomatic dispenser with 12 wines, while a temperature-controlled fine wine room houses collectibles like the 2009 Silver Oak Cabernet Sauvignon ($400 a 3-liter bottle) and the 2012 Hall Cabernet Sauvignon ($600 a 6-liter bottle).
About 80 percent of the stores’ space is devoted to wine. Clear signage, such as placards hanging from ceiling chains, easily steers customers to the products they want. Signs on the rear wall of the Norwalk store provide helpful wine and food pairing information. Equally helpful are displays that ease the wine-purchasing process with headers like “Best Selling Cabs,” which highlights the 2013 J. Lohr Estates Seven Oaks Cabernet Sauvignon ($15.99 a 750-ml. bottle); “90+ Wines Under $20,” featuring the 2009 Castiglion del Bosco Brunello di Montalcino ($16.99); “90+ Wines Under $30,” including the 2012 Luca Malbec ($29.99); and “Hidden Gems,” showcasing the 2013 Château Haut-Plaisance Bordeaux ($9.99). Wine barrels are sprinkled around the store to help promote featured wines and beer, such as the 2011 White Cluster Chardonnay ($9.99) and Green Flash Hop Head Red Double IPA ($10.99 a four-pack of 12-ounce bottles). Wines like 2012 Marqués de Montañana Garnacha from Spain ($15.99) are highlighted with a 20-percent discount on the purchase of six bottles, including a free tote bag.
Spirits also receive special attention. For example, a recent case-stacking display of Jose Cuervo Silver or Gold Tequila ($34.99 a 1.75-liter bottle) was cross-merchandised with the brand’s Margarita mix ($3.99). In addition, mainstream and craft beer get support, such as a stacking of Coors Light ($19.99 a 30-pack of 12-ounce cans with a $3 mail-in rebate) and an attractive Goose Island rack, including Matilda ($11.99 a four-pack of 12-ounce bottles). The stores shun supplier p-o-s, however, opting for an uncluttered appearance, right down to the chain’s own uniform shelf tags.
Sampling Sells
Leonard concedes that while their effectiveness is difficult to measure, in-store wine sampling events can be a powerful merchandising tactic. “I love having a lot of wine tastings in the store,” he says. “One of the biggest apprehensions consumers have about buying wine is that they don’t know what it tastes like. Once you let them try it, they can decide right there.” The stores typically host free sampling events on Fridays, Saturdays and Sundays led by staff employees or winery representatives. More intimate tastings for fine and limited-release wines are sometimes held in the stores’ wine cellars. Stew Leonard’s Wines also often hosts events led by renowned winemakers, chefs, authors and celebrities, such as actors Danny DeVito and Lorraine Bracco, restaurateur Lidia Matticchio Bastianich, and author and television personality Bethenny Frankel.
In recent years, some units have been hosting grand tastings. At those complimentary events, reps pour up to four different wines at stations around the store. Past grand tastings at the Long Island locations have focused on locally produced wines. “These events are really exciting for us,” Leonard says.
When it comes to grocery or wine store events, the company approaches the opportunities from the perspective of the consumer. “We even brought a customer to Vinitaly with us one year,” Leonard says. Wine dinners are frequently held at local restaurants in association with the stores. Stew Leonard’s Wines is also a big supporter of charitable wine-tasting events that benefit groups like the American Cancer Society and United Way and that help advance water safety and swimming lessons for children. Media support for the wine shops includes occasional radio spots, print advertising and circulars, while the company’s email newsletter, website and social media pages also keep customers apprised of store specials and events.
Treasure Hunt
Stew Leonard’s Wines generally carries about 2,000 wine SKUs. “The majority of wines we sell are in the $10-to-$20 range,” Leonard says. “But we have Bordeaux offerings that go up to $1,000 a bottle.” Current trends at the stores include Spanish wines, rosés and red blends, while Josh Cellars Cabernet Sauvignon ($13.99 a 750-ml. bottle) has emerged as one of the chain’s top-selling brands. “We’re always bringing in new, exciting wines for our customers. It’s a bit of a treasure hunt for shoppers,” Leonard adds, pointing to recent finds in Spain, Germany and Italy. Those lesser-known wines, such as the 2014 Don Leonardo Cabernet Sauvignon from Argentina, are merchandised as “Hidden Gems,” and they’re usually priced significantly below national brands.
The company is looking to take advantage of the recent popularity of Bourbon and other whiskies, as well as craft beer. Leonard has allocated more space to Bourbon, crafts and hot labels like Tito’s Handmade vodka ($29.98 a 1.75-liter bottle), with each unit stocking about 500 spirits SKUs. Similarly, the stores are expanding their craft beer offerings, particularly promoting brews from local producers, such as beers from Connecticut’s Two Roads Brewing Co. ($8.49 to $11.99 a six-pack of bottles). A “Pick Six” program allows customers to create their own six-packs for under $10, and with the opening of the new Stew Leonard’s grocery store in Farmingdale, New York, next year, the company will begin offering beer growlers. A typical Stew Leonard’s Wines location stocks more than 600 beer SKUs.
Great brands and great merchandising aside, Leonard says it’s the company’s knowledgeable and engaged employees that have made the wine shops a success. Sales staff receive ongoing wine education via classes, wine tastings and visits to wineries in California, Spain, France, Chile, Italy and beyond. Some 15 team members are certified specialists of wine by the Society of Wine Educators.
If there’s one area where Leonard would like to improve the wine shops, it’s online sales. “We’d like to work on a click-and-collect model, where a customer can go to the website and put together a great order and then pick it up at the store,” he explains.
But strong merchandising will continue to remain a hallmark of the stores. “This business was built with the intention of helping customers pair a great wine with food,” Leonard says. “We have a knowledgeable staff to guide them and good merchandising to draw them in.”