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To Succeed, Liquor Stores Must Adapt

4 min read

Francois Guilloux is a Frenchman come to Little Rock by way of China. For love of an Arkansas woman, he tells us: “Arkansas women are really amazing. It’s a diamond that I bet Arkansas men want to preserve and keep secret.”

He also knows something about the liquor industry, working as he does as a consultant with the liquor store consultancy firm of David Williams & Associates of Little Rock. Although this column focuses on restaurants, we’ve given ourselves permission to stray into related territory.

We visited with Guilloux recently, by phone and by email, in reporting on the potential for Arkansas to turn completely “wet” if voters in November approve the Arkansas Alcoholic Beverage Amendment. He discussed the challenges package stores face in an uncertain environment.

“I feel liquor store owners are responding in two groups to the threat of change: the ‘status quo group’ and the ‘new generation group,’” he said.

“The first group is reluctant to change, primarily focused on a defense strategy, ready to spend several hundred thousand dollars to preserve their individual territory.

“The second group of owners are also concerned about this potential change in the competitive landscape but are embracing the opportunity to challenge their current business model and bring back the customer to the center of the equation.

“These liquor store owners are relocating their businesses, building larger liquor stores able to compete on price, investing over 8 percent of their sales on advertising and branding, allocating a budget to train their staff and elevate knowledge in front of customers, bringing technology in their store to track customer needs, strengthening their inventory management.”

Guilloux pointed to the emergence in the state of “destination” package stores and “megastores,” citing among them Macadoodles in Springdale and Sodie’s in Fort Smith. Stores like these emphasize the entire shopping experience and seek to offer a unique environment.

Scott Clark, a lifelong Fort Smithian, bought Sodie’s Discount Liquor at 5518 Midland Blvd. three years ago. He’s building a 10,000-SF store, Sodie’s Wines & Spirits, at 5401 Phoenix Ave., to which he’ll relocate.

Clark, a principal at the insurance company Brown Hiller Clark & Associates, plans a sampling bar with two Enomatic wine-dispensing machines, a growler station with up to eight craft beers on tap and a walk-in humidor, among other features.

“I just wanted to bring something to Fort Smith that was different,” Clark said. I wanted it to be a fun location.”

He hopes to open the relocated store around Thanksgiving and will employ 15 to 20 workers.

The business challenges to liquor stores arise not only from potential changes in the law, but also from generational changes in consumer habits and desires.

Clark, for example, is eager to appeal to younger consumers and has found social media an excellent way to reach them. In addition, he said, millennials aren’t brand loyal and they like to experiment.

Clark Trim, president and owner of Colonial Wines & Spirits in Little Rock, agreed with Scott Clark’s assessment of millennials. Although Guilloux didn’t specifically mention Colonial, it has many of the features of a “destination” package store: a sampling bar for wine and beer, for example, and a staff that prides itself on its knowledge.

It’s also successful, with sales last year in excess of $5 million, Trim said, which meets Guillox’s definition of a “megastore.”

“What we saw 15 years ago were consumers that were totally brand loyal, and if they had scotch and water every evening, that’s what they had every evening,” Trim said. “With the millennials, they may drink moscato this evening and a hearty cabernet sauvignon tomorrow evening. And they may drink a domestic beer that’s been around the U.S. forever, and the next day they may pay $20 for 750 mL of an imported or craft beer.

“So there really is, with the millennials, no brand loyalty,” he said. “They are extremely interested in trying new products, and they are driving the craze for what we’re seeing in the industry right now, which is a boom of new products.”

The liquor stores most likely to succeed, whatever the results of November’s election, are those that can adapt to meet the heightened expectations of savvy shoppers and new generations.

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