How Garfield’s Thrives in a Competitive Market

Operating an off-premise chain in Illinois is daunting. The state allows Big Box stores like Walmart and Costco to carry liquor and wine, and the Chicago metro market is saturated with alcohol-retail licenses. Competition for consumer dollars is literally on every corner.

So how has Garfield’s Beverage Warehouse managed to remain successful in the Prairie State since 1952? The chain, which today counts six locations in and around Chicago, has relied on family values, customer service and staying ahead of competition.

The Beginning

Like many successful American chains, Garfield’s started in a single location as an entrepreneurial venture. Founder Norman Garfield took our loans from his uncles in 1952 to open Cicero Cut Rate Liquors in the Chicago suburb of the same name.

The 2,000-square-foot store included a bar, recalls Norman’s son and second-generation owner Bruce Garfield. Also unusual was that the store was not self-serve. Customers would purchase bottles displayed behind the bar.

For eight years that original location operated, before Norman moved the business to a larger store in 1960. In 1961, ten-year-old Bruce began working at his father’s store. “People would bring in bottle caps and returns and I would bring them into the back,” he remembers. “I would put things on the shelf. Really menial work.”

At 15, Bruce convinced his father through to let him work the register — even though he wasn’t old enough to do so legally. Bruce truly grew up in the business. “All of our holidays were always spent working in the stores,” he says.

By 22, he was working full-time for his father — and wanted a shop of his own. Two years later he spied a store for sale in Crystal Lake, IL. Bruce convinced his father to buy the business and let him run it. Not wanting to change the name, they left it as Cardinal Wine and Spirits.

Bruce kept his eye on expansion. He successfully advised his father to buy two more stores in northeast Illinois, which they also called Cardinal. The chain added more locations throughout the ‘70s, including a large store on Central Ave in Chicago. Bruce’s brother Bennett joined the family business around 1980. Together the siblings founded a marketing company that grouped their stores with other smaller Illinois retailers in a co-op that gave all members greater purchasing power.

As the years went on, Norman’s health declined. The company began to sell off some locations. Bruce’s son David, who went to school to become a car mechanic, instead decided to join the family trade after graduating college. And unfortunately, Norman passed away around the same time the company gained its third-generation Garfield in David.

Garfield’s Is Born 

What appeals to Bruce about working in alcohol retail is “the action in the stores.” His brother, however, prefers the marketing side and chatting all day with suppliers. This difference led the brothers to agree in 2008 to split up the company. Bruce took over the family stores, while Bennett retained the marketing business.

At this time, the original chain was down to two locations. Since it sold branded stores and started the co-op, there were Cardinal shops around the area that were not owned by the Garfield family. Bruce did not like the confusion this caused for some customers, who mistook other stores for his. As he and his son worked together to grow out the chain again, they decided it was time for a new name.

“We gave it a lot of thought, but ultimately my son convinced me to just use our own name,” Bruce says.

The company rebranded as Garfield’s Beverage Warehouse in 2016. Finally, a company founded on family collaboration took on the name of its heritage.

Among the newer locations is Garfield’s Beverage Express in the trendy Wicker Park neighborhood of Chicago. The 3,000-square-foot store reflects the in-and-out mentality of its shoppers. “This is a nice corner store where a lot of millennials come in,” Bruce says. 

This year the company sold its original Chicago store on Central Ave. “That neighborhood is changing, and so are we,” Bruce explains. “We want to be more upscale now, with lots of wine and a greater variety of products.”

The company still operates in Crystal Lake, where Bruce ran his first shop at 24 years old. That original business outgrew its location and has since moved across the street into a 15,000-square-foot-space that had been a supermarket.

Garfield’s is focused more these days on variety and premium bottles.

Regulatory Hurdles

Every state presents challenges with its unique alcohol laws, and Illinois is no different. Any sized store, “from bodega to big box,” can sell liquor, explains Adam Silverstein, Garfield’s COO/marketing manager — making for “a battle we face every day.”

Compounding this issue is that Illinois does not enforce minimum margins (much to Bruce’s chagrin). Thus a bottle that Garfield’s sells for $8 can retail for $6.99 as a loss leader at a larger store. So how can smaller shops survive?

“When we’re battling Costco and their 5-6% margins, we do it with customer service and better selection,” Bruce says. “And we have to do our own thing or we wouldn’t be in business. You can’t be a follower. Obviously you have to watch what your competition is doing, but you have to do your own thing.”

Garfield’s focuses on creative, modern ways to bring in customers.

The stores regularly hold tastings and advertise them through social media. They’ll bring in a celebrity who represents a brand when possible. Recently this included Chicago Bears legends Mike Ditka, Otis Wilson and Dan Hampton, plus Real Housewives Ramona Singer with her eponymous wine label.

Variety is Key

Maintaining a great variety of products is also critical, especially when attracting millennials with their ever-curious palates and lack of brand loyalty.

“You really have to stay ahead of the curve now with brands,” Silverstein says. “You have to be very careful what brands you put in front of millennials in prime store locations, while also still allowing them to decide where the store goes next. That means you constantly have to change up your store in terms of displays and shelf sets.”

It also means providing more options and keeping up with what’s new.

“The biggest difference in the business today compared with years ago is that the business moves so much quicker,” Bruce says. “There’s no loyalty to products and there are more new innovations constantly coming.”

This requires Garfield’s to carry more SKUs. In decades past, the company would buy multiple cases of a staple brand like Canadian Club and sell it off gradually — but not anymore.

“You can’t just carry 100 wines — now you need 500,” Bruce says. “You can’t just have 50 craft beers — now you need 100. Today we carry over 20,000 items.”

Of course, if a customer asks for a specific item that is not inventoried, that’s the cue for Garfield’s to order it. “We’re always happy to order something if we can,” Bruce says. “We’ll go all out to get products.”

Cultivating Staff

Bruce points to his company’s customer service as how Garfield’s can thrive in the hyper-competitive environment of greater Chicago. That starts with having the right staff.

When hiring, Bruce looks for enthusiasm, people who seem motivated, and long-term potential. “I’m looking for people who want to make this a career, not just a temporary move,” he says.

Garfield’s has employees who’ve been on staff for decades. Jeremy Brock, Garfield’s chief purchasing officer/general manager, joined the company 18 years ago as a stock boy. Silverstein also started as a stock boy — as his college job in 2004. 

“We don’t see each other as co-workers, but as family,” Silverstein says. “That comes from the text or phone call you receive every day from a coworker that’s not work-related. Bruce and David have done a really great job at cultivating a family environment at Garfield’s. And that helps everyone buy into what the end goal is.”

As for staff strategies, Bruce believes in the importance of putting enough employees on the floor at all times. They must learn the proper balance between stocking shelves, helping customers and other necessary tasks. Bruce delivers much of the training in-person himself.

Garfield’s will send new hires to educational sessions — held by training associations like WSET or at local distributors — to boost their product knowledge. Bruce also sends new employees to his on-staff experts in beer, wine and spirits for additional tutoring. 

“And when you find someone who’s motivated and willing to be loyal,” he says, “you pay them more and you find ways to keep them motivated constantly.”

Industry Partnerships

In a fast-changing world, Garfield’s has thrived by adapting to the times. As digital delivery apps like Drizly have risen in prominence, Garfield’s has cashed in by being proactive.

Drizly allows users to order alcohol by phone and have the purchase delivered to their door within an hour. Even before the app expanded into Illinois, Silverstein reached out to Drizly to form a relationship.

When the company eventually did enter the state, they were ready to work with Garfield’s — even if the retailer wasn’t quite prepared itself. “We were going through a POS change at the time,” recalls Silverstein. “We were getting our inventory dialed in correctly.”

Once upgraded, Garfield’s systems were compatible with the Drizly platform. Since all Garfield’s inventory is now fed through a central hub server (before, inventories were tracked at individual stores only) the system allows even suburban Garfield’s locations to deliver products ordered through Drizly. And Garfield’s has become the official Illinois retailer for the popular app. 

“We’ve been lucky that the Drizly folks see it a real partnership,” Silverstein says. “Our view has always been that any extra business is good for us. And they know that with us they can fulfill orders within their timeframe and go above and beyond for customers. It’s great for both sides.”

Kyle Swartz is managing editor of Beverage Dynamics magazine. Reach him at kswartz@epgmediallc.com or on Twitter @kswartzz. Read his recent piece When Will Americans Embrace Premium Vodka?

Leave a Reply

Your email address will not be published. Required fields are marked *