Costco

[NewYorkTexan]

A Costco warehouse just opened near my home and I felt obligated to see what all the excitement was about.  Walking past the tower of a lifetime worth of toilet paper in shrink-wrapped packaging, I went straight for the wine section.  

The crowd was 4 deep by the wine bins and everyone was raving about the great values.  People where grabbing wines, as many bottles as they could hold.  In some cases I do not know if they even looked at the labels.  

When I finally got close enough to see the wines, most were selling for the same retail price you would find in a local wine shop.   There were no discounts or promotional sales that I could see.  

Am I missing something?

[Katherine]

Sure. It's a conspiracy. Maybe you were not affected because you were not susceptible, but so many have fallen before you.

"Must shop...people buying stuff...must be on sale...must buy...more stuff"

[jhlurie]

Books have been written about the appeal of 128 oz. Heinz Ketchup bottles, NewYorkTexan.   The psychology is very bizarre.

How this behavior manifests itself in the wine section, I'm not sure.  Katherine's implication that people THINK they are getting a deal is part of it.  A desire for people to prove their ability to conspicuously consume ("gee... I've never bought wine by the case before") might enter into it.

[Rail Paul]

In NJ, the Wayne Costco sells some beer by the case at the lowest permited price. In practice, this means they meet the advertised prices from Shop-Rite, Home Liquors, etc. Hard liquor prices tend to be very good. If the hooch is not being promoted somewhere, Costco won't be cheaper, in my experience.

They do the same for the heavily advertised wine specials (Beringer,  Jadot, Dubouef, Gallo Sonoma etc) but rarely for the stuff which is never on sale.

NJ's liquor rules are difficult. As I understand the rules (from a friend who managed a chain store), all out of state vendors may sell only to a wholesaler. The entire product chain must be inspected and certified, right back to the vineyard, to be free of criminal history (we prefer our own criminals, thank you). This cuts out many small wineries which don't produce enough to make an inspection expense worth their time.

That distinction is part of NJ's case against allowing wine by mail.

The local bar and liquor store may purchase only from NJ licensed wholesalers, all 10 of them. Wholesalers issue a draft  price once a month, for the following month's weeks. Everyone gets a peek at the other guy's numbers. The number is then revised and published. That's how you get the same promo price in 4-5 places. Costco puts the promo price up for the month, and sells you a toaster or 4 lbs of yeast or 84 oz of Snickers while you're in there.

[MsSumida]

OK..to clear up some misconceptions...Costco prices on wine and liquor are overall better than most stores due to their lower markup AND special packaging they get.  If you notice, many of the floor stack of wines and liquor are in slightly different boxes for easier access by consumers, thus less labor on Costco's part.

Many top selling brands will be around the same price as larger stores and advertsing chains, because of the minimum prices set by the state.  For example, it is illeagal to sell any wine, liquor, beer or alcoholic beverage for less than cost, but cost or cost plus Ũ.01 is accepatable.  So, if Kendall Jacson Chardonnay COSTS the retailer ű.01, then it can be sold for that price plus whatever markup the retailer adds. (note: small stores can be caught between a rock and a hard place because of the extensive advertising by large chains...the large stores can buy and re-sell, and afford to charge the lower prices, while the small guy has to charge more...)

The reason why you don't see many 'small wineries' at Costco has nothing to do with the state laws...it simply has to do with space and quantity issues..Is the wine going to be a big enough seller to make it worth the space????  So Rosie, you'll probably NEVER find Turley at a Costco (sigh), and Turley does NOT want to be sold there either.  One or two people would snap it all up, and at a very low markup, it changes the perceived value of the wine.

As for pricing, yes the prices change monthly.  All pricing must be submitted to the state ABC by the 10th of the month for the following month.  All the prices are finalized and 'sealed' by the 15th of that month.  So between the 10th and the 15th, distibutors will send representatives to Trenton and the ABC to review competitors pricing.  If they want they can then ammend their prices to match the competitors, or not.  Costco does not get special pricing.  All quantity and discount levels MUST be shown, there is no 'Blind Filing' (where quantity and price levels were not disclosed to other Wholesalers) anymore.  BTW there are literally close to 100 Wholesalers in the state for all alcoholic beverages, many just carrrying a couple specialty items.

Sorry for the long read..

[Fat Guy]

I haven't checked a Costco wine section lately, but I do remember a couple of years ago when Costco was selling Dom Perignon below cost (this may not have been the case in every state, of course, given the various local regulations) as a loss leader.

[MsSumida]

Costco in Wayne, NJ has sold Dom Perignon for just over cost.  Many store owners buy it there and resell it (not legal), because they can't get any from the Wholesalers in NJ.

[Jason Perlow]

As if you'd want to drink Dom Perignon anyway. Yeech. Give me Bollinger or Pol Roger anyday over that stuff.

[Beachfan]

The answer is not only state specific, but wine specific.  You need to know your prices.  I've gotten super prices on Dominus, Beaucastel, various Chablis, Latour, Chateau St. Jean Cinq Cepages (an overrated wine) and decent California Chardonnay (Byron Reserve, Cambria Catherine's).

On wines similar to those, their prices were just average.  However, I scout the Costco (here in Southern California) about twice a month.

[Keith Lesnick]

I have always found Costco to have some of the lowest prices on wines in the DC area.  Yes, it is true that at some point the local wine store might have a better price on a selected wine.  But, overall, they beat the spread everytime.

Worth breaking your back carrying that case up three flights of stairs.

Actually, I think some people just like paying retail.

[Rosie]

You don't have to buy wine by the case at Cosco. You can buy a single bottle. As for the Turley--I get it mail order now. BTW--in Hawaii I think every restaurant had Turley on their wine list.