Competition Brews

Although it’s a mega-retailer that has been expanding in ways both big and small, Wal-Mart Stores Inc. hasn’t always been seen as a major player in the beer market — until now.

Walmart held its first Adult Beverage Summit in September 2012 and since then, it has nearly doubled its number of alcohol buyers to 12, shifted its store inventory to provide more room for beer, and begun offering discounts on a variety of beer types from craft to premium. Additionally, its newest stores are designed to highlight the beer section.

“Focusing on adult beverages is a decision we made this year,” Walmart spokeswoman Deisha Barnett said last summer. She noted that feedback received on the move had been very positive and called the company’s relationship with distributors “very collaborative.”

Good news for Walmart is likely to be bad news for convenience stores it competes with in the beer category. “The Walmart strategy involves deep discounting, increased merchandising, promotion to consumers and improving distributor partnerships, and its efforts are already paying off on all fronts,” noted Donna Hood Crecca, senior director of Technomic Inc.’s adult beverage resource group.

Instead of changing the way they operate in order to stay competitive, c-stores should continue what they’re already doing — but do it better, she said. Crecca recommends revisiting relationships with distributors to ensure these partnerships are being effectively leveraged, and sharpening category management tactics to present brand, style and package selections that satisfy a particular store’s customer base.

Additionally, c-stores can capitalize on their very name. “Recommit to best practices that will prohibit out-of-stock situations at peak c-store beer sales times, such as Friday evenings. By doing so, operators can win on the convenience factor,” Crecca said.

Another way c-store operators can ensure their beer section offers maximum appeal is to stay abreast of what’s popular today and what’s likely to be the next big thing. Craft, super-premium domestics and import beer are currently seeing the most growth. However, c-stores must base their offerings on what their core customer base wants and what will appeal to new and infrequent customers to drive initial and repeat visits, according to Crecca.

“Staying in tune with what’s trending locally is crucial to driving beer sales, but it has to go beyond knowing which local craft and cider brands are popular,” she advised.

By doing the research and taking all these steps, c-stores can position themselves in consumers’ minds as more than “just another place to buy beer.” Walmart has deep resources, but c-stores are just as capable of prioritizing intelligent category management and customer service.

Once these habits help establish a strong foundation, Crecca said c-store operators should seek out opportunities to showcase local favorites, such as teaming up with brewers to offer a unique promotion or coordinating marketing efforts with local events.

While creativity can be key, though, she also stressed that sometimes the best practices are the simplest ones. “There’s no substitution for the basics,” she said.