CHARLOTTE, N.C. -- Walt Sumner has brought a touch of Seattle to the Southeast. Sumner, the wine buyer at Seattle's Larry's Markets before joining Harris Teeter here as corporate beer and wine manager in April 1994, has dramatically increased the chain's assortment of fine wines and imported and microbrew specialty beers.
The expanded assortment, along with an increasingly educated and more upscale, cosmopolitan population and a booming economy, has helped push the 140-unit Harris Teeter chain to the forefront of wine and beer sales in this region.
While other supermarket operators are scaling back their wine and beer assortments in the name of category management, Harris Teeter has successfully courted upscale customers from wine shops and other supermarkets by expanding its breadth of offerings, employing knowledgeable wine stewards, offering in-store sampling and cross-
merchandising wine in other areas of the store, such as meat and deli departments, to build impulse sales.
"What we've attempted to do here is to shift the emphasis from simply stocking what sold in the past to leading and educating our customers and trying to anticipate what their desires are. We took a gamble and brought the products in, put them on the shelf, merchandised and priced them fairly so that the customers would purchase them, and they did, in phenomenal numbers," Sumner told SN. "Beer and wine dovetail so well with our image as a food store. We carry nonfood items, but we are a food store, and beer and wine is a natural companion," he said.
SN interviewed Sumner in the wine and beer department of Harris Teeter's new 57,800-square-foot store that opened in June in suburban Matthews Township. In this unique store -- which is about a mile from Harris Teeter's corporate headquarters and places a heavy emphasis on fresh foods -- wine and beer occupy 942 square feet of floor space, with 72 linear feet devoted to warm and chilled beer and 138 linear feet to wine. Additional wine displays are scattered throughout the store. Like the rest of the store, the wine department is decorated with antiques. Old California license plates, barrels, crates and plastic grape vines adorn the tops of the shelves.
The wine department in the upscale Matthews store is about triple the size of the one in the Super Kmart Center a couple of miles down Independence Boulevard, the local main drag, and is also substantially larger than the departments in the nearby Bi-Lo, Food Lion and Winn-Dixie stores with which it also competes.
Harris Teeter sells beer and wine in all stores where it is allowed by law. The departments range in size from 450 square feet to 1,200 square feet, encompassing anywhere from 3% to 10% of total selling space. The number of beer and wine stockkeeping units also varies from store to store, with the Matthews unit stocking 1,580 SKUs.
Although Sumner realizes the importance of category management, he said it is important for Harris Teeter to offer as wide a selection as possible in wine and beer. But selection varies from store to store, largely because Harris Teeter avoids cookie-cutter formats and tailors each location to fit the needs of the community.
"Our company and beer and wine department goals are to really pay attention to each store's demographics and try to focus in on what is going to be good for that store. Some stores may require a much larger inventory and fewer turns per year and yet be more profitable than a store that is exactly the opposite. On a store-by-store basis and a market-by-market basis, we're trying to determine where that perfect point is," Sumner said.
One area seeing chainwide growth has been Harris Teeter's specialty beer offerings. Historically, Harris Teeter had sold domestic mass-produced beers, but when Sumner came on board he contacted local distributors and brought in import, microbrew and specialty beers that had proven to be winners in Seattle, with the theory that patrons in the Southeast would also like them.
"We're trying to portray the image that Harris Teeter is the place to go for beer. If you want good beer, if you want to experiment with microbeers, then go to Harris Teeter," Sumner said.
The strategy paid off handsomely, he said. "In general terms, in 15 months we have increased our specialty beer sales well over 200%."
And although people are snatching up the specialty beers, that has not cut into sales of the mass-market domestic brews.
"We're pacing ahead of national trends in domestic beer sales. The domestic beer industry is flat, but we're up. We're not up in the triple digits, but we're up significantly above the national trends in domestic beer," he said.
Wine sales are also up substantially, and Sumner attributes much of that growth to the population influx of Northerners chasing after the booming economy. That, in turn, has helped stimulate sales among the native locals, with the greatest growth coming in the moderate $9- to $12-a-bottle range.
"The newcomers have helped educate and develop the market. We find that when we put the products on the shelf, there is a ready market for it. We don't get phone calls and letters asking us to carry such and such a wine or beer, but when we put it out there, it sells like crazy," Sumner said.
While some pockets in the South, like Atlanta, Charleston and Hilton Head Island, are fairly epicurean in their wine tastes, Sumner said the rest of the region is quickly catching up. California domestic wines are the most popular, but strong growth is also being seen in Italian wines. In the Southeast, chardonnay is the most popular varietal and merlots are developing a following.
"The trend here is the same that occurred in Seattle and occurred on the West Coast eight to 10 years ago. We're seeing the same patterns with some idiosyncratic differences," Sumner said.
To help educate its customers Harris Teeter employs wine stewards in 25 of its locations. Long a staple on the West Coast, Sumner said wine stewards had been tried in the Southeast years ago by the former Big Star chain, although Big Star may have been ahead of its time. The stewards will help customers select wines, gift-wrap purchases and help prepare gift baskets.
The wine stewards have played a hand in helping to build sales of Harris Teeter's more expensive wines, too. As a result, case sales are increasing at Harris Teeter, the opposite of the national trends.
"Our wine consultants are more than just a customer service that helps with special orders," Sumner said. "Our wine consultants are fairly knowledgeable with food and they help in selecting. Oftentimes the customer will come in with wine questions first, and the wine consultant will take them around and show them food products. It is a very symbiotic kind of relationship.
"A food retailer has an advantage that a wine shop or specialty shop does not have in that we have people shopping for their dinners and meals. It is that same customer who wants quality food products, such as meats, seafoods, deli, specialty foods and basic produce that wants quality wine," Sumner said.
"We're keeping our traditional grocery store customers while also offering our customers who traditionally shop at wine specialty stores the opportunity to pick up wines here," he added.
And to build total store sales, Harris Teeter extensively cross-merchandises its wines in other areas of the store, such as meat, deli, produce and bakery.
"We want to tie in wine and food in every area of the store where applicable. Whether the wine actually sells physically off of that particular display is not that important. It sends a message, even if you don't buy that bottle of wine off of the case, that wine and food go together. And by the time you're done shopping, maybe we've pounded home the point enough that you are going to stop in the wine department and pick up a bottle of wine for your meal."
Sumner said that while Harris Teeter often advertises its beer and wines, the chain is really relying on word of mouth and repeat business to increase sales.
He also hopes to build sales through the institution of a private-label wine program
that is currently being contemplated. Harris Teeter used to have a private-label wine line, but Sumner said it wasn't effectively merchandised and was discontinued after it lost its luster.
"There is not only a place for private-label wine, but it is a potential huge profit-maker, and one of the reasons that the customers will eventually come back to see us. It is a signature item that no one else can have and it brings them back in."
But he noted that unlike canned peaches, private-label wines in the United States do not sell well under the store banner label, so a new brand would have to be created.
Sumner is also building store loyalty through the effective marketing of locally produced wines and beers, and has even built regional sets of local products.
"One of the things we are going to hang our hat on is endorsing and promoting local products. We're really backing local producers. We think that is a built-in market for us and it is easy. If we can promote North Carolina or other local products, our customers are going to see that we are tied into the community better.
