Play It Again, Sam’s
WITH MORE THAN $60 MILLION IN ANNUAL SALES, SAM’S WINE & SPIRITS IS THE LARGEST SINGLE STORE WINE RETAILER IN AMERICA, AS WELL AS A CHICAGO INSTITUTION.
There are many second- and third-generation beverage alcohol retailers who boast about having grown up in the family store. Chicago retailer Brian Rosen likes to say he learned the business from the passenger seat. Literally. He recalls that starting at about the age of seven, he was enlisted to sit in the front seat of the store’s station wagon and make sure it didn’t get ticketed or towed while the driver was delivering orders to office buildings and apartment houses throughout Chicago.
The Third Generation: Brian Rosen, co-owner of Sam’s Wine & Spirits in Chicago, follows his father Fred and his grandfather Sam in operating one of the top beverage alcohol operations in the country.
These days, Rosen is in the driver’s seat as owner, along with his brother Darryl, of Sam’s Wine & Spirits, the retail operation founded by their grandfather, Sam Rosen, in the late 1940s. Working along-side their father Fred at the gigantic store on Chicago’s North Side, the brothers mark the third generation in the business. And the business has certainly grown with each passing generation. What started as a neighborhood tavern is now, with sales in excess of $60 million last year, the nation’s single largest beverage alcohol outlet.
“We are the nation’s largest wine retailer,” Rosen said with understandable pride. Having outgrown their original location the family constructed the current 33,000-sq. ft. superstore in 1996. “It’s truly a one-stop shop for everything — wine, spirits, beers and accessories,” he added. As would be expected in an operation so wine-oriented, the sales ratio at Sam’s works out to be about 80% wine, with 11% of sales attributed to distilled spirits and the rest split between beer, non-alcoholic beverages and foods.
Much More Than a Local Liquor Store
And while the store has been a fixture in it’s neighborhood for more than half a century, it’s grown to be much more than just the local liquor store. “The customer to-day is more educated,” Rosen observed. “They demand more from the retailer. They demand not only price, which is easy. That’s a function of buying. Today, they want price, they want quality, they want selection and they want parking. The customer wants excellence in all aspects of the business. These days, customers are willing to pay a few more pennies on the dollar to be treated better. They want to be guaranteed a good visit from entry to exit.”
It’s that guarantee of price, quality, selection and a knowledgeable, courteous and helpful staff that has allowed Sam’s to thrive. “In a general sense, everyone is our customer,” said Rosen. “Nationally, we are shopped by wine connoisseurs. Sam’s is known as the place for price, selection, service and that hard-to-find bottle of wine. And then I’ve got a regular customer who never buys anything but a sandwich and bottled water. We specialize in wine, but we’ve also become that generic place to get everything.
Sam’s has one of the most extensive selection of wines in the U.S. and features nearly 300 different types of beers.
“We don’t really consider any local competition,” he continued, explaining that Sam’s is much more concerned with competing against the major national retailers. “The company we probably most keep an eye on is Costco.”
Costco would probably be kind of hard for the Rosen family to ignore since the low-cost chain recently opened a store a few blocks away. Surprisingly, having the giant retailer muscle it’s way into the neighborhood hasn’t really had any negative effect on Sam’s.
“I’m quoting my grandfather here, but Sam always said, ‘You cannot run a business by price alone.’ You have to factor in service. You have to consider selection. There’s an X factor that’s about more than price,” Rosen pointed out. “If you want to buy a just-released Bordeaux future for ten bucks cheaper, then knock yourself out. But if you want to educate yourself about that Bordeaux, you’re in the wrong spot [at Costco].”
Give The Customer A Choice
When Rosen talks about selection being a big part of what makes the store different, he’s by no means exaggerating. A scan of the wines listed on the store’s website reveals 488 cabernet sauvignons (327 from American producers), 904 chardonnays (346 American) and 373 wines from Bordeaux. That degree of choice is impressive, but probably shouldn’t be surprising from a store with close to $50 million in wine sales. It’s in the less popular varieties that Sam’s shows the true depth and breadth of its wine expertise. There aren’t many stores that can offer more than 300 rieslings and more than 40 gewurtztraminers. Not to mention the 22 wines available from coastal South Africa or the 78 from South Island, New Zealand. And how many retailers would be able to tell a customer where Wachau is, let alone present them with a selection of 36 wines from the region ranging in price from $12 to $105 a bottle? (Wachau is in Austria, by the way.)
Despite the fact that customers can select wines from anywhere in the world, the largest percentage of sales, according to Rosen, comes from California wines (1,758 different labels available) followed by French (1,907 different wines offered). “Customers are choosing Australian, Spanish and Argentine wines because of the value,” he observed, citing the success of a number of wines such as the Australian phenomenon Yellow Tail. “There are great wines for a lot less money. Everyone knows that Australia is making $20 bottles of wine that are selling for $4.99 to $7.99.”
In the coming years he believes that we’ll see a continued influx of good wines from regions “where labor is cheaper, the price of land is less and there isn’t a lot of marketing money.”