May 02, 2011

Sales at Pennsylvania wine kiosks are falling behind expectations

Very nice article with video showing entire wine purchase process. Article also provides excellent data on breakeven.

Sales at Pennsylvania wine kiosks are falling behind expectations | PennLive.com

It’s late afternoon Thursday heading into the weekend. A perfect time to buy a bottle of Chardonnay or a pinot noir.

Or, maybe not. Shoppers at the Giant Foods off of Linglestown Road in Susquehanna Twp. wheel their carts past the massive Pronto Wine Kiosks operated by the Pennsylvania Liquor Control Board. Most don’t bat an eye at the unassuming oversized refrigerators.

View full sizeJOE HERMITT, The Patriot-News, file
Robin Atwood-Fidler of Carlisle purchases a bottle of Yellow Tail during the first day of sales for the wine dispenser located at Wegman's in Silver Spring Township.
Not the mothers commanding their children to walk. Not the grandmothers, the fellow in the U.S. Army fatigues, the workman just off his shift or the young woman wearing blue scrubs.

They are not enticed by the Sutter Home White Zinfandel for $8.99, the Fish Eye Pinot Grigio for $4.99 or the Chateau Ste. Michelle Riesling for $9.99.

In fact, business is better at the nearby in-store Members 1st Federal Credit Union. The Pennsylvania Lottery machine isn’t doing so badly either.

But the wine kiosks? Everyone bypasses the opportunity to buy wine in a Pennsylvania supermarket, with the exception of one shopper — Carly Wismer of Susquehanna Twp.

She is the only person in two hours to purchase wine. She selects a 1.5 liter bottle of Sutter Home Chardonnay for $11.99. It’s about the fifth time she’s used the wine kiosk.

She’s not intimidated by the camera mounted on the machine, the fact she has to breathe into a Breathalyzer and hear a chirpy computerized woman’s voice leading her step-by-step through the purchasing process.

“I’m not a tech person but I like things quick and simple,” Wismer says.

The LCB could use more customers like Wismer. Sales at the state’s 32 wine kiosks in supermarkets around the state are falling behind expectations.

The agency has said the kiosks each need to sell an average 300 bottles a week for the program to succeed.

The kiosks were launched last summer to make it easier for consumers to do one-stop shopping and pick up their bottle of wine while at the grocery store. But not without a few hiccups. Right before Christmas last year the LCB shut down the kiosks due to mechanical problems.

Before the snafu, the kiosk at Giant sold an average of 164 bottles per week from June through mid-December, according to records provided by the LCB. Sales have dropped in half since they went back online in January.

Sales at the kiosk in Wegmans on the Carlisle Pike in Silver Spring Twp. have also dropped in the first few months of this year, although sales were brisk the week before Easter.

The local wine kiosks are doing much better than some other machines around the state.

At the Shop ‘n Save in Gibsonia six bottles of wine sold the week of April 11 and 9 bottles were dispensed the week of April 18. The Giant Eagle in New Kensington sold 16 bottles the week of April 11 and 12 bottles during the week of April 4.


Wine dispenser open for business at Wegmans
pen for business at Wegmans
Watch video
The LCB’s chief executive officer Joe Conti has admitted the kiosks are under performing.

“If we could get them to do it 50 times a day in every location it would be a great deal for the Commonwealth because that’s the break even number,” he said at a recent hearing sponsored by the Law and Justice Committee.

The agency is taking measures to boost sales. Last week it announced a pilot program to sell liquor alongside wine in grocery store kiosks to keep pace with customers’ demands and make kiosks more profitable.

That concept is drawing criticism from religious advocacy groups, union leaders and legislators. Stephen Drachler, executive director of United Methodist Advocacy in Pennsylvania, called the program “the wrong idea at the wrong time” and said it sends young adults an inappropriate message.

Shoppers like Ryesha Pitts of Harrisburg admire the wine kiosks, although she’s never purchased wine from them. She said they are a better fit for wine than bottles of run and vodka.

“I don’t think that should be in a grocery store. Yeah, wine you can have a nice glass of wine with your dinner,” she said.

The kiosks caught the attention of Jeff and Kim Robinson of Linglestown as they stopped by the Giant for a few groceries. They’d never noticed the machines before. Jeff Robinson attempted to open one of the locked kiosk doors. No luck.

“I thought it was a humidor for cigars. It’s all wooden cases in a temperature controlled environment,” he said.

They said they prefer to make wine and liquor purchases in a liquor store, not through a machine that asks for identification and requires a Breathalyzer.

“Now it’s a headache. It’s not a convenience,” Jeff Robinson said.

Perhaps, the LCB needs to market the kiosks to busy moms like Lisa Aaron of Lower Paxton Twp. She’s used the machines several times to purchase wine, mostly on the weekends for dinner parties and gatherings. She’s sold on them for the convenience factor.

SALES PER WEEK
Wine kiosks went offline for repairs between mid-December and late January. The glitch has been fixed, but sales have slumped in recent months.

Giant in Susquehanna Township:
164 bottles per week from June through mid-December
83 per week from late January through April

Wegmans in Silver Spring Township:
250 bottles per week from June through mid-December
168 bottles per week from late January through April
Source: Pennsylvania Liquor Control Board


Sales at Pennsylvania wine kiosks are falling behind expectations | PennLive.com

Posted by staff at May 2, 2011 04:14 PM