It’s been nearly 50 years since its founding as a single liquor store, and the business has grown to become one of the major liquor retail forces in suburban Chicago. But even today, Hammond, Indiana-based Nick’s Liquors remains a mom-and-pop business. “We’re still very family-oriented,” says Liz Kikalos, who co-owns the operation with her brother, Nick Kikalos, Jr. And while Nick’s has grown into a multi-unit chain known for its aggressive pricing and substantial product selection in one of the most competitive markets in the country, the company never strays from its roots as a neighborhood store dedicated to offering the best deals to its customers.
The first Nick’s Liquors was opened in 1971 by the siblings’ parents, Nick and Helen Kikalos, in Hammond, an industrial city about 25 miles south of Chicago. Two more locations were added in Hammond in 1982, and another in 1994. In 2005, the business expanded into nearby Hobart, Indiana and in 2013 a sixth store opened in Merrillville, Indiana. “As with many family businesses, my sister and I helped out, working on weekends and during school vacations,” recalls Nick. Today, in addition to the six liquor stores, the family operates two tobacco shops called Nick’s Cigarettes, with locations in Hammond and Dyer, Indiana. Nick’s Liquors employs 80 people, while Nick’s Cigarettes employs ten.
Two of the Nick’s Liquors locations are just a mile or two from the Illinois state border. As a result, the stores have always competed more in Chicago’s tough beverage alcohol market than in downstate Indiana. “We work on a low-margin, high-volume model,” notes Nick Jr. “We also focus on customer service by carrying items that people want. That’s how my father started the business, and we’ve continued on with it.” Nick Kikalos Sr. passed away two years ago; Helen remains active in the business.
While Nick’s operates in the greater Chicago market, it must adhere to Indiana regulations—a reality that’s had a mixed impact on the chain over the years. “There are so many competitors, both independents and chains, so we really have to stay on top of things,” says Nick. But while big-box stores like Walmart and Costco have become aggressive in beverage alcohol, Liz points to the distinguishing factor. “They’re not full-service operators like we are,” she says. With customer service added into the mix of low prices and broad selection, Nick’s Liquors draws brick-and-mortar customers from Michigan, Wisconsin, and Ohio, as well as Indiana and Illinois.
The Kikaloses have capitalized on the volume discounts offered to retailers in Indiana, buying in advance whenever possible. “We use our buying power,” explains Nick, noting that the chain has added some 13,000 square feet of warehouse space to two of its stores over the years—space that’s largely allocated to spirits. “If there’s a good deal out there, it will be in our warehouse.” The stores themselves range in size from 3,500-8,000 square feet, with the Kikaloses owning the real estate that four of the stores sit upon. The other two locations are leased.
Spirits Drive Sales
Spirits now account for a whopping 70% of Nick’s sales, with beer at 16%, wine at 4%, and miscellaneous items accounting for 10%. “Things have changed drastically over the last 10-15 years,” says Nick. “Spirits have gone through the roof. They’ve just skyrocketed.” Back in the ‘80s and ‘90s, beer contributed 40% of total sales while spirits and wine combined for just 20%, and tobacco the remainder. The changes in sales breakdown at the stores over the years demonstrate the increasing role spirits are playing in the Chicago-area marketplace, as well as the falling demand for beer and tobacco products and the impact that revisions to beverage alcohol fair trade laws in both Illinois and Indiana have had on the retailer.
The Nick’s stores stock about 1,200 spirits SKUs, priced from $6 a 750-ml. of Dimitri vodka to $800 for Hennessy Paradis Cognac. Liz, who oversees spirits buying for the chain, notes that the 80-20 rule definitely applies, with 80% of the stores’ spirits sales coming from 20% of the SKUs. “Vodka has always been our spirits leader, and it continues to be,” she says, noting that moderately priced vodkas such as Tito’s ($25 a 1.75-liter) and New Amsterdam ($18) perform best. Cognac is the second-largest spirits category for Nick’s, with top labels including Hennessy ($30 a 750-ml.) and D’Ussé ($40).
As elsewhere, Bourbon is trending. Top-selling Bourbons at Nick’s include Maker’s Mark ($24) and Jim Beam ($14). Like other leading retailers, Nick’s has partnered with whisk(e)y brands like Buffalo Trace and Maker’s Mark on private barrels in recent years. “It’s a great experience,” says Liz. “It’s nice to offer a hand-picked product to your customers.” Among other spirits categories that have grown at Nick’s in recent years is Tequila, driven by brands like Jose Cuervo 1800 ($23 a 1-liter) and Patrón ($35 a 750-ml.).
Beer Losing Share
While the chain is still one of the largest beer retailers in the area, beer’s share of company-wide sales has been on the decline for several years. Nick’s stocks 1,000 beer SKUs, priced from $1 a 24-ounce can of Milwaukee’s Best lager to $200 for a 24-ounce bottle of Samuel Adams Utopias. But when it comes to brews, nothing beats Modelo Especial, according to Nick. The Mexican beer ($30 a case of 12-ounce bottles) has emerged as the chain’s top seller overall, while Miller Lite ($18 a case of 12-ounce bottles) is the leading domestic offering. While sales of craft beers have fallen off in recent years, general manager Larry Jarvis notes that local 3 Floyds Brewing Co. is still a strong seller.
As liquor stores in Indiana are the only trade channel permitted to sell cold beer to go, most of the beer sold at Nick’s is refrigerated. The units feature 12-18 cooler doors, depending on the size of the store. Jarvis says he’s hopeful that any efforts made by competing trade channels to revise the state’s regulations on cold beer sales will be defeated. “We’ve been very pleased that Indiana has kept the right to sell cold beer with the state’s liquor stores,” he says. “We have faith that the state will continue to do that. We’re licensed and monitored differently than grocery and convenience. We appreciate that the state of Indiana trusts us with that responsibility.”
Wine isn’t a big category for Nick’s Liquors, but the chain stocks about 600 wine SKUs, most generally priced at $5-$10 a 750-ml. Liz says the northern Indiana market leans toward sweet wines and that “high-tier wine sales are not reflective of our market.” Wine brands that perform well at the chain include Barefoot sweet red blend ($6) and Stella Rosa Black red blend ($11).
Keeping It In The Family
To promote its offerings, Nick’s relies heavily on its website and Facebook page. Each month the chain features hundreds of specials on its website. “It’s amazing how if you offer products at the right price, word spreads,” Nick says. “Word of mouth is our best advertisement.” The company doesn’t sell product online as Indiana prohibits beverage alcohol retailers from shipping. Nick’s does host weekly in-store tastings of spirits, wine, and beer, set up and led by distributor and brand representatives. Nick says that the chain returns the support it receives from the local community via donations of merchandise and promotional items to benefit first responders. “Hammond has been very good to us, and we believe in giving back,” says Liz.
Nick’s also works hard to support its own employees. When Indiana repealed its Sunday sales law last year, the Kikaloses opted to keep their stores closed. “There are only so many things you can give your employees,” explains Liz. “We felt it was important for them to know that they would have every Sunday off, with the understanding that if our business suffered, we would have to renegotiate.” Nick adds that it was a hard decision since the store’s competitors were remaining open. “But we’re a family-owned company and we want our employees to have that day to themselves,” he says.
The Kikalos siblings plan to serve the needs of their employees and customers well into the future. Plans are in the works to move the last store opened in Hammond—and one of the leased locations—to a larger, purchased site across the street within the next year. “We’re pretty happy with where we are right now,” says Nick. “But if a good opportunity arises, we’ll jump on it.” The third generation of Kikaloses is already involved in the business; Nick’s son Zachary serves as district manager. “We have a large family,” says Liz. “The door is always open for any family member who would like to get involved in the business.”
Noting that her father came to the U.S. from Greece as a child and had no formal education beyond eighth grade, Liz says her parents built the business through hard work and dedication, a work ethic that was instilled in their children. With 48 years under its belt, Nick’s Liquors is a shining example of a successful family business, as well as a family living the American dream.