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How low are wine prices these days? Awfully low

There has been a lot of news about wine prices holding steady lately, but it’s been mostly economic — studies, analysis, and so forth. That’s the kind of stuff, as accurate as it is, that is sometimes painful for consumers to read. Not many of us worry too much about grape tonnage.

On the other hand, it’s very easy for consumers to understand low prices, like these in a maling sent this week from Total Wine, the large regional retailer that wants to be a national chain:

•  Barefoot pinot noir for $4.97, almost 30 percent off the suggested retail price.

• The 2009 Groth Oakville cabernet sauvignon, a previous vintage, for 12 percent less than the current vintage’s $57.

• Bogle chardonnay, a mainstay of the $10 Hall of Fame, for $6.97.

• A previous vintage of King Estate pinot gris, about as dependable as a $17 wine can be, for $11.97.

• Perrier-Jouet Grand Brut, a holiday Champagne staple, for $39.99 — 20 percent off suggested retail.

Some of these, like the Barefoot and the Bogle, are likely loss leaders — priced to lure customers to the store in the hope they’ll buy other, more profitable, wines. But the prices also speak to two other trends. First, there’s still a lot of unsold wine in the supply chain left over from the recession, and especially expensive wine. Until those wines are sold or disposed of (right, Treasury?) they will continue to drag down prices. The Total mailing also had previous vintages from Cakebread, Chimney Rock, and Silver Oak, each expensive and popular California producers.

Second, competition among retailers is fiercer than ever, with liquor superstores growing 15 percent since  2008, three times faster than their conventional counterparts. Total, with almost 100 stores, wants to double revenues to $2 billion by 2016, while BevMo, with 144 stores mostly in the west, wants to expand outside its base. All that competition — which is especially brutal in Dallas, where Total opened last year — means more discounting in an attempt to build market share. And that means more low prices.

Throw in the economy, which has been treading water for at least a year, and the idea that wine prices are going to go up anytime soon is as silly as the Wine Curmudgeon using wine scores on the blog.

For more on wine prices:
Retailers and wine prices
Wine prices in 2013, one final time
The revolution in cheap pinot noir

2 Responses to How low are wine prices these days? Awfully low

  1. My company, Appellation Trading Company, sells finished cases primarily to wineries. We also do custom cases for wine clubs along with a few close-outs. The leader note on your piece suggests wine prices are down. You mitigate that with the notes on retail tactics by the big boys. I suggest that the retail war and ‘push’ from large wine producers to increase sales at the expense of some margin is 99% of the story.
    The idea that there is a bunch of expensive and great old stuff out there is not my experience. Two years ago that was true and we did well shipping it to China, and domestic retailers. I do not see any of that now and I do look. Napa and Sonoma red bulk is zero for ’10. Spotty for ’11, so I don’t see the trend.
    Bulk is down a little but not generally. Calif Zin is still expensive, Chard is down but not by a ton,Central Coast guys are tight.
    Thanks for the article.
    Paul

  2. relaxeau@earthlink.net' Kurt Burris says:

    Paul: I have to disagree. As a small broker in Sacramento, the big boys won’t even give me a sniff if I won’t discount substantially. And there is a lot of very good wine in Trader Joe’s these days.

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