Alcohol for Everyone? More Stores Sell Beer, Wine

What makes a grocery store stand out from its competitors? Try a fresh, cold beer on tap.

Last week, a Piggly Wiggly store in Myrtle Beach, S.C. introduced taps dispensing craft beers into growlers -- half-gallon, glass containers also sold at the store -- for $9.99 to $12.99. As with Piggly Wiggly's more traditional alcohol offerings -- wine and canned and bottled beer -- customers aren't allowed to drink their purchases at the store. But what they lose in instant gratification, beer lovers might gain in savings.

"It's a lot cheaper to buy it from us than to pay $4 or $5 for a beer at a bar," said store manager Timmy Parrott.

Parrott's thinking seems to be increasingly popular among retailers large and small as more stores look to off-premises alcohol sales -- sales of alcohol outside of eateries and bars -- to grow their business and meet customer demand.

Earlier this year, the pharmacy chain Walgreens announced it was returning beer and wine to its store shelves after abandoning the products more than a decade earlier. Discount chain Family Dollar is testing beer sales at 10 of its Florida stores this year.

There was "a groundswell of interest saying, 'Hey, now that you've got these great coolers here, it'd be great if you stocked some beer too,' " said Family Dollar spokesman Josh Braverman.

Between Sept. 2008 and last month, the number of U.S. stores engaged in off-premises beer sales jumped by nearly 2,600 while wine sellers increased by more than 3,000, according to market research giant Nielsen. The increase occurred despite the fact that the total number of U.S. grocery stores, convenience stores, drug stores and others declined by more than 3,000.

"While there's lots of disarray going out there in general because of the economy, there are more stores that are deciding they want to get into the beverage alcohol business," said Danny Brager, vice president and group client director for the beverage alcohol team at Nielsen.

Come for the Wine, Stay for the Cheese

The trend is largely driven by the recession, Brager said, as more cost-conscious consumers choose to skip the bar scene to spend a night at home, drink in hand, Brager said.

"A big night in is replacing a big night out these days more and more, so retailers are recognizing that consumers are looking to stores to buy products more so than going out and enjoying an alcoholic beverage while they're out," he said.

Craig Wolf, the president and CEO of Wine & Spirits Wholesalers of America, said his members are seeing lower demand from the struggling restaurant industry, which has been hit hard as consumers cut down on their discretionary spending. But wine wholesalers, too, he said, have noticed an increase in demand from off-premises stores.

"They have started to get inquiries by historically non-alcohol retailers who are starting to question whether they ought to get into the business," Wolf said.

Brager said that including alcohol in their inventories helps stores in three ways. For one thing, alcohol products can encourage foot traffic into the store. They also have higher profit margins than other goods.

But perhaps the most surprising benefit of alcohol products is that they tend to boost sales of other groceries: consumers often pair their alcohol purchases with specific foods -- like meat and cheese to accompany a bottle of wine, for instance.

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