Why does anyone think $7 Sam’s Club wine will boost sales?
How much trouble is the grocery store business in? A lot, as we saw when Target decided beer and wine was going to rescue its profitability. But the situation is even worse than that – Sam’s Club, the Walmart version of Costco, will launch its own wine brand to boost sagging sales.
Will they ever learn?
Apparently not, as this quote from the story in the above link demonstrates: “In fact, the affordable price tags and devoted fans of Costco’s Kirkland Signature booze has played a big part in the 46% growth in alcohol sales over the last five years at Costco. That’s a loyalty and sales boost Sam’s Club is likely attempting to copy.”
Which was exactly the reason given for Target’s upgrade of its beer and wine business. Why Walmart, which is supposed to be one of the world’s savviest retailers, thinks selling $7 cabernet sauvignon and chardonnay is going to make any difference in its nearly $500 billion business escapes me.
Note, too, that nothing in the above link or in any other story I found discussed quality, though there was lots of talk about adding “unique” products and luring high-end demographics into Sam’s Club. Because, of course, it’s wine, and those of us who drink it will buy what we’re told and figure it’s supposed to taste that way. Right, Trader Joe’s?
Which is the point every retailer who tries to knock off Costco’s Kirkland wine misses. The wines are often worth drinking, and even offer value in a way most Big Retail private label wines don’t. If the new Sam’s Club wines have anything in common with Walmart’s Oak Leaf brand, a lot of people will be fired, sales won’t increase, and nothing will change on the bottom line.