‘Never play cards with a man called Doc. Never eat at a place called Mom’s.’ Those are two of novelist Nelson Algren’s infamous rules of life. Here’s one worth adding to the list: ‘Never get in a retail battle with a man called Crazy.’
In this case, we’re discussing Crazy Bruce, a name well known to Connecticut late-night television viewers and wine, beer and spirit shoppers. The original Bruce is long gone from ownership of the two stores that still bear his name, but his retail philosophy – built on loss leaders, frequent discounting and high volume – continues to drive sales at the current owner’s two stores.
Today, there are two Crazy Bruce’s Liquors units: an 18,000 square feet superstore opened in 1984 in Bristol, Ct., known, among other things, as the largest seller of Anheuser Busch beers in the state; and a 15,000 square feet small shopping mall co-anchor in West Hartford that skews higher in wine sales. Both are advertising and deal-driven destination stores and high volume emporiums, where frequent deep discounts based on supplier close-outs keep a steady flow of repeat customers who generally leave with an armful of bottles.
While as a privately owned business Crazy Bruce’s managers are reluctant to share financial details, to get an idea of their annual volume, note that their total inventory at any one time (excluding busy November – December months when the storage areas are groaning with cases) the Bristol store carries about $1 million in inventory, while the West Hartford store accounts for about $800,000. In November and December, months that account for nearly 25% of Crazy Bruce’s annual sales, the stores bulk up to about $3 million combined, as managers take advantage of buying power and supplier deals to purchase many items to last them until the following autumn.
Popular prices and discounts remain the cornerstone of Crazy Bruce’s well-established strategy. In blue collar Bristol, which does about 15% more business in volume than the West Hartford unit, the store splits business about 35% each for wine and beer and 30% spirits, while in West Hartford, the split is 40% wine and 30% each beer and spirits. Discount wines priced less than $5 account for a remarkable 25% of wine sales, and the stores routinely sell more magums of wine than 750s. Few non-sparkling wines exceed $50. Supermarket shopping carts filled with close-outs priced as low as $4.99 or even $2.99 crowd an aisle near the front of the stores, and one afternoon during a visit, nearly every customer who entered at least checked them out to see the latest deal.
Faced with a challenging marketplace ‘ economic downturn, the threat of big box retailers, a tax minded state government and a drive in some quarters for Sunday openings (an idea many stores including Crazy Bruce’s are fighting) – the stores manage to thrive, maintaining an average ticket of about $35.
Purchasing Long Range
‘We have to purchase long range to save money and to offer our customers the lowest price we can,’ says West Hartford store manager and buyer for both locations Michael Bradley (June Curtin runs the Bristol store, and current owner Mark Wilson gives them a free hand to run them both.) ‘Many spirit items are purchased for a year at a time, to make sure we pay the lowest possible price. We use the time we spend with suppliers wisely, trying to see their marketing strategies as well as giving suggestions as how I feel their products will sell.’
‘The way the liquor laws are written in Connecticut, everyone pays the same price whether it’s for one case or for 1,000. So what wholesalers do to give a buying advantage to large stores with dollars and space is let us know the pricing going forward,’ he says, a policy that allows big buyers like Crazy Bruce’s a chance to stock up. For instance, a supplier will share forecasted price changes with Bradley, pointing out that a case of Joe’s vodka will be priced at $100 in March, $110 in April and not back to $100 for six months. Then Bradley will buy to last the stores until the next low price period, basing his requirements on a few years’ worth of monthly sales history he’s gathered, his most important tool in this strategy.
‘We need to be able to see what we sold month to month, year to year, and we can look back 15 years and see the trends are fairly consistent. By having proper information from suppliers, we can accurately judge how much we need, and that saves us crucial margin points.’
This is vital since the state also enforces a minimum bottle price law, and many retailers sell popular products at the same price. So Bradley must look for other ways to be aggressive on pricing to keep customers coming in. ‘We continue to look to buy as many closeouts as possible and because of our size we have storage to buy as many cases as possible.’
At West Hartford, storage reaches approximately 5,000 square feet of warehouse space, complete with forklifts, towering shelves and 25 feet ceilings. Small wholesalers marvel that Crazy Bruce’s outlets have more storage space then they do, yet there’s still room to grow if needed.
The space allows Bradley great leeway. For instance, last year the supplier of a well-known premium vodka brand had an excess of a certain flavor that they needed to shed. ‘I bought every case they had, and I sold 500 cases in three months. I could have looked at it and set a higher price, held it for five years and quadrupled my money, but our customers like to come in here and see a $2.99 wine or $5.99 vodka – it brings them in.’
Similarly, the recent changeover at Wild Turkey of their 80 proof bourbon brand to 81 proof caused a ripple in the supply and made available to Crazy Bruce a reduction of about $10 per half gallon. Enter Bradley, who scooped up as much as was available. ‘My Wild Turkey sales are booming this year because it was a name brand and people knew it was a deal. It may have taken sales away from Jim Beam or Jack Daniel’s, but it helped me and my customers.’
It’s not just close-outs, either. Grey Goose goes for $29.99 for a 750 ml, and during the holidays for the last two years he’s sold magnums for $49.99 as a loss leader. Single malts are discounted then as well to garner gift sales.
With the abundance of wine brands and regions and its general perishability, Bradley takes a more analytical approach: a 7% or 8% discount on close-outs will attract him to invest more than, say, a 3% deal. The risk? ‘Wine trends change and people aren’t as brand loyal, and wine sales aren’t as consistent as liquor, so we don’t buy that long.’
Bradley says wine buyers, even those who come in willing to spend $20 for a particular bottle, will frequently add a few more from the discount carts. But he carries only a handful that retail above $50, and he generally won’t take on deals in high-end wine ‘ ‘They have to be a popular brand, region or price. I’ll buy a tempranillo that I can sell for six bucks that used to be $10, but I probably won’t buy one that’s currently sold for $20 that I could sell at $10; they simply don’t turn over for us,’ he says.
Close Supplier Relationships
With this buying approach, close relationships with suppliers and wholesalers is key. Some consult with him on the price cut they are willing to take, knowing that if Crazy Bruce’s takes a large position in a product, Bradley and team will work hard to sell it, and not buy and hold hoping for the highest return. It’s complicated, though: to make the deal, wholesalers are required by minimum pricing laws to register a product with the state as a closeout in advance, so settling the price with buyers like Bradley is the first step, as he can’t list wine or spirits below the wholesale bottle cost.
This pricing maneuver is especially important at the West Hartford store, less than 30 minutes from the Massachusetts border. Stores there, with no sales tax (Connecticut tacks on 6.35%), a lower excise tax and no minimum bottle law can sell wine and spirits at the cost of acquisition.
The story is similar with beer, but here, Crazy Bruce’s has more price leeway, since he’s allowed to sell at the cost of acquisition. ‘If Bud costs me $14.99 a case, I can sell it that month as a loss leader to entice people to shop here that month. I know, come the holidays, if I’m going to spend $5,000 on newspaper ads, how much more I will make if I sell beer at cost.’ It might cost him a thousand dollars in Budweiser profits, but the Crazy Bruce’s way is to gamble that the 200 customers who are enticed by the low beer price will buy other items as well.
Both are big A-B stores, but being New England, craft is a major part of Crazy Bruce’s business. Local favorites Long Tail, Harpoon, Shipyard and Sam Adams do very well, especially the seasonal releases. Here, too, Bradley makes a deal: when brewers release a new seasonal, chances are the previous edition is still in many stores, leaving wholesalers with some overstock. So when, say, the Sam Adams winter release comes out, Bradley checks to see how much Oktoberfest is available, and cuts the price to the minimum mark-up.
‘Customers frequently ask me, ‘What’s the next close-out beer going to be?’ If they’re getting a six pack for $4.99 that retailed at $7.99 a week before, they’re happy.’
With a long aisle of crafts sold, Crazy Bruce’s makes sampling easier by hanging empty six packs for customers to mix and match and try at about 10% less per bottle. ‘Some of these are very expensive beers, $10 or $11 a six pack, and people are reluctant to spend that much on something they’re afraid might be too hoppy or bitter they’ve never tried before. This way, they can find out.’
Just the way Crazy Bruce might have done it. Not a bad way to run a business ‘ build loyalty through well-known or reputable brand deals and anticipation about what the next big bargain will be and the regular customer will reward you with enthusiasm and dollars. You might have to be crazy to start out that way, but Crazy Bruce’s has proven that like the proverbial fox, the original knew what he was doing after all.
While Bruce Goldberg no longer has any piece of the business, his original concept and wacky ads still have defined the store five years after his departure.
In 1964, Bruce Goldberg opened up White House Liquors in West Hartford, Ct., which, as it sounds, was simply a clapboard dwelling converted into a liquor store. (Today that store is still standing but now a real estate office.)
Connecticut keeps a close tab on liquor store prices and in those days, the state dictated mark ups, so competitors essentially sold all goods at set prices. Hard to make a name for yourself in that environment, but Goldberg saw a way around it: sell soda, mixers and ice at extremely low prices to attract customers to White House Liquors. He also started the practice, still at the core of the business, of purchasing close-out wines and spirits and selling them at the lowest legal price, buying large volumes to take an item off his market, offering customers products that his competitors didn’t have and giving his customers a big savings. This loss leader practice earned him the nickname ‘Crazy Bruce,’ and it stuck
Goldberg knew a catchy phrase when he heard one, so he rolled with the nickname and starting calling the store ‘Crazy Bruce’s White House Liquors.’ That’s when inspiration really struck: he’d take the Crazy Bruce character to TV ads, complete with him singing wacky songs he’d written based on show tunes or old time music and changing the lyrics to promote the liquor stores. Soon he began to wear funny hats and dance up and down the aisles of the store in the ads as well. Nothing was too crazy for Bruce.
Meanwhile in the late 1970s, the store moved 500 feet down the road to an approximately 5,000-square-foot building where the current West Hartford store is housed.
Store manager Michael Bradley grew up in the neighborhood, and knew Bruce as a local kid who came in with his father. Bradley’s seen the wine and spirits landscape change dramatically in the area. ‘In the past there was a liquor store on every corner. Once the big box stores started to arrive, the permits to sell became more valuable than the stores themselves,’ he says.
As the store and his business, the commercials made Goldberg a local celebrity, getting received national attention on ‘The Jay Leno Show.’ TV cook Rachel Ray had Goldberg on her show to make a commercial about her from her kitchen.
In November 2007, Bruce Goldberg exited the business, selling to entrepreneur Mark Wilson, though he agreed to be the face and silly TV person for a while, contracting to perform in 15 more commercials, all of which he wrote and starred in. Eventually, says Bradley, the company will need to develop another ad strategy, but with Bruce’s ‘Crazy man’ face prominently featured on the faÃ§ade of the stores, it will be hard to separate the stores from the concept. Not that anyone is crazy enough to try.