Beer, Wine & Liquor Stores
Companies in this industry sell beer, wine, and liquor products from physical retail establishments. No major companies dominate; in the US, individual states have different laws regulating liquor stores, complicating the ability to form national chains.
Europe has the highest proportion of drinkers and the highest levels of alcohol consumption per person in the world, according to a study by RAND Europe. Off-premise alcohol consumption is increasing at the expense of on-premise drinking there. Prices on off-premise alcohol are considerably lower than on-premise prices with retailers, especially supermarkets, able to purchase large quantities of alcohol at lower prices through volume discounts. Price differentials between countries — alcohol sold in France is significantly cheaper than alcohol sold in the UK — encourage cross-border shopping.
The US beer, wine, and liquor store industry includes about 34,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $54 billion.
Personal income, consumer tastes, and entertainment trends drive demand. The profitability of individual companies depends on effective marketing and competitive pricing. Large companies offer wide selections and deep discounts, but small companies compete by offering specialized merchandise, providing superior customer service, or serving a local market. The US industry is highly fragmented: the top 50 companies account for less than 25% of sales.
Liquor stores compete directly with grocery stores, warehouse clubs, convenience stores, and some drugstores, and indirectly with restaurants, bars, and other establishments that serve alcohol. In addition, direct-to-consumer sales are growing as restrictions are eased. Online sales of beer, liquor, and wine for delivery increased about 35% in 2017, according to e-commerce analytics firm Slice Intelligence. Wine is the most popular, accounting for about 65% of online alcohol sales, followed by liquor (about 20% of online sales), and beer (15%).
The growing list of online players in the alcohol sales and delivery business include Blue Apron, which ships exclusive wines; alcohol delivery startups such as Drizly and Postmates; and Amazon. Amazon's 2017 purchase of Whole Foods Market increased the number of cities served by its Prime Now membership service, which delivers alcohol as well as groceries. Amazon's voice-activated assistant Alexa can even be used to order alcohol in some areas.
Products, Operations & Technology
Distilled spirits (liquors) account for about 40% of sales, wine for about 30%, and beer and ale for about 25%. Other products include groceries, cigarettes,
Sales & Marketing
Finance & Regulation
Regional & International Issues
Also includes the following chapters:
Quarterly Industry Update
Trends and Opportunities
Call Preparation Questions
Glossary of Acronyms