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BevAlc Retail and Total Wine: The Celebration Continues

Thomas Paulson
Aug 19, 2022
BevAlc Retail and Total Wine: The Celebration Continues

The Advanced Retail Sales report from the U.S. Census Bureau was released this week. With it, came the June data for BevAlc retail sales (below), which continues to run YTD despite the consumer shift to on-premise, experiences, and international travel. Holding 2021’s level leaves this retail category +23% over pre-pandemic.

  • Placer.ai shows the major BevAlc retail brands experiencing softer visitation trends from May to July, with Spec’s being the laggard. (Spec’s lags with the overall market in Texas. The hot summer may be a factor for Texas’ weaker trend.) Factoring in product inflation, sales for the industry is roughly even with 2021. For more details, please refer to our report on the BevAlc retail industry and why the category is one of the few structural beneficiaries coming out of the pandemic, and why it is a superior retail category.

  • Along with that report, we also produced a Tenant Overview Report on Total Wine & More, where we described how Total Wine had grown into a $6B benign category-killer and why its business model, expansion opportunity, and unit economics were impeccable. Since we crafted that report, Total Wine has opened nine new locations. (We expect about 15-20 per year.)  
  • Three of the new locations are where we expected in California, one in East LA and two in the San Diego market. One is a new Indianapolis location, which we called out in the report and which should be a high-volume location given the precedence in the market. Total Wine’s third location in the Denver market ended up being in Littleton near a Whole Foods, REI, and Lowe’s. The College Station location is the first in that market. The Coon Rapids, MN location is an extension of its Twin Cities presence and where a lot of new homes have been built. The new location in Wilmington, NC is a flagpole in that market. (Total Wine has 12 other locations in NC.) The new location in Pensacola, FL is also a flagpole location, while also getting it near the Mobile, AL market.
  • As shown below, the new San Diego location on Carmel Mountain Road has opened softer than a typical Total Wine opening. This is likely due to it being located in an expensive housing neighborhood, which results in the location underindexing (versus the typical overindexing) in Gen-Z and Millennial households. As concluded in our report, Total Wine locations do best in markets that out-index in these generational cohorts.

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Thomas Paulson

Director of Research and Business Development, Placer.ai

Thomas Paulson spent 20 years as a Wall Street analyst and a member of asset management teams at AllianceBernstein and Cornerstone Capital, representing top-50 ownership positions including Target, Home Depot, Nike, Amazon, Google, and many more.

He brings consumer related expertise and knowledge of enterprises in retail, CPG, financial services, telecom, and entertainment.

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