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One Big Wine Retailer Scales Back

Photo by: Greg Gorman

Posted: Jul 13, 2009 1:26pm ET

I needed to replenish some household supplies so on Sunday I went to Costco to load up.

I've noticed that Costco has cut down on the use of some of its floor space, eliminating some products and leaving vacant some space that was previously stocked with items.

On my way out I decided to check out the wine selection, as I usually do, since Costco usually has a wide range of good, highly rated wines, typically at discounted prices. I wanted to see what specials were being offered and it took me a few moments to realize that the wine department had been shrunk by half or perhaps even three quarters.

There used to be two or three “islands” of wines, with 40 or 50 different wines on each stand. But now there was only one stand. And except for Champagnes, nearly all of the wines were priced under $30, and many well under that.

I had half-expected the opposite, that in these economic times there would be an abundance of wines and deals. When I asked the manager why the reduced inventory, he said that they just weren't selling as much wine and that they wanted to reduce inventories. Same as the rest of us, I suppose, but it seemed odd if not a bit eerie that one of the nation's largest wine retailers had scaled back its wine department so drastically.

So, for those of you who buy wine at Costco and the like, have you noticed anything similar at your local venue?

Richard Scholtz
Austin, TX —  July 13, 2009 2:43pm ET

The Costco I go to in Austin has not changed their wine selection. They are still the same size and price range.

However, I have noticed one large retailer in Austin has changed their marketing strategy. One day a month, they will offer up 20 wines to taste for a small nominal fee. A year ago, there were at least 2-3 selections in the $30-$40 range. In the past two months, I haven't seen a single wine in the tasting over $20. Thankfully, the quality of the offerings has not gone down, which has allowed me to walk out of the store with a mixed case of wine for around $150. Just some food for thought.
Loren Lingenfelter
Danville, CA —  July 13, 2009 2:51pm ET
The Costco in Danville has not scaled back at all, in fact they have some good deals like Chappelett 2006 Cabernet (94pts) for $33.99 and a bunch of $10-30 deals.
Jason Neyer
July 13, 2009 2:59pm ET
Yes, I go to five different Costco warehouse in the Sacramento and S.F. Bay area and all of them have toned down the wine section. The biggest change I see is less if not no $100+ Bordeaux/Cali cab. If they have it, it's been there for a while.
Allison Helfen
Renton, WA —  July 13, 2009 3:01pm ET
We own a small boutique wine shop in the Seattle area. Back in October, we actually increased our inventory, bringing in larger capacity racking and also new stacks for value wines. In the past two months, wine sales have dropped drastically and as a result, we too have scaled back our inventory again. This is a COD state, so any wine purchases, tie up any cash you may have.We can only hope, this turns around very soon.AllisonThe Wine Alley
William Thomen
San Francisco —  July 13, 2009 4:32pm ET
I shop at the Costco in San Francisco. In the bins, I have noticed an increased focus on well rated wines in the $15 to $25 category, as well as, a reduction in more expensive wines. They have also added sake and more of the Kirkland bottlings.
Ari Glazer
Florida —  July 13, 2009 4:53pm ET
Wine selection at Costco's in South Florida have been deteriorating for some time now. It is a far cry from 2003, when you could stock up on great deals on 2000 Bordeaux
Jamie Sherman
Sacramento —  July 13, 2009 4:53pm ET
I visit Costco often and always liked their wine section but have bought less frequently over the last few months. I didn't really think about it until your blog but there has been a change. Number of selections seems similar but there are fewer of the high end selections available. Amongst the rest of the wine, variety (aka new labels) has diminished greatly.
Ted Henry
Napa, CA —  July 13, 2009 5:53pm ET
Jim- I agree with Loren. Danville (and Navato)have a far better variety than either Fairfield or Vallejo. Fairfield has always had the smallest wine selection. If you're including wine on your Costco shopping list you really have to plan accordingly.

When do we get a Costco in Napa???
Glenn S Lucash
July 13, 2009 7:06pm ET
Here in NJ, my Costco does not offer wine but I've seen in my travels that they sometimes have some great deals. I haven't purchased a bottle in over 6 months. I'm just depleting my in house inventory which might take a couple of years. I haven't seen many great wines offered at auction at great prices either, otherwise I would have bought a little something.
Matthew Slywka
Seymour, CT —  July 13, 2009 8:35pm ET
To my knowledge, we only have one Costco in CT that sells wine in Orange. I must say they always have the same stuff in there (2003 Duckhorn Howell Mt. Merlot, Mondavi Napa Valley Cab, etc.). Maybe once or twice a year they will have something interesting. I'm jealous of the finds I hear about in other parts of the country.
Matt Scott
Honolulu HI —  July 13, 2009 8:46pm ET
Costcos here in Oahu has had some great deals and some names. '05 Sassicaia, '05 Mouton, '05 Columbia Crest Reserve Cab and some great Rieslings. There has been no Chappelett here, and do I wish there was.......
Andrew Miner
July 13, 2009 9:27pm ET
I have a independent, family owned wine shop in CT. Let me just say that Costco is the beginning of the end for the boutique wine shop. No longer is expertise and selection valued, but stacked discounted wine with no service whatsoever. Soon we will only shop at Wal-Mart and Costco. Unfortunate, James, that any wine shop would be honored to have you as a customer, and you choose Costco as a place to shop which I refuse to call a wine shop. Once our stores are gone you'll just see the Nielsen top 100 on the shelves. Support the local small wine merchants everyone!!!
Gary Stoyan
Sherman Oaks, CA —  July 14, 2009 8:02am ET
Here in the Los Angeles area I have not seen any change. I shop at about 4 different Costcos from Thousand Oaks to Burbank, California.
Gary Stoyan
Sherman Oaks, CA —  July 14, 2009 8:02am ET
Here in the Los Angeles area I have not seen any change. I shop at about 4 different Costcos from Thousand Oaks to Burbank, California.
Steve Ritchie
Atlanta, GA —  July 14, 2009 9:24am ET
Actually, a Costco in Atlanta is featuring 2005 First Growths for $500-$800 each. I guess the right buyer might just come along and pick up a few. I am focusing my buying on my favorite local stores, however. The price "gap" between the megamarts and the small stores is surprisingly narrow (if there is a gap at all), and for some of the big names, I see a price PREMIUM at the large retailers... go figure.
Matthew W Heller
Natick, MA —  July 14, 2009 10:54am ET
The Whole Foods in Wayland, MA has cut their wine section by more than 60%. This was a fairly small store to begin with, but being in a well-to-do town, it's pretty telling that they felt the need to reduce inventory so drastically.
James Laube
Napa, CA —  July 14, 2009 11:42am ET
Andrew, I've bought wine at just about every kind of venue, but don't buy wine at Costco...I just browse.
John Stickler
nyack ny —  July 14, 2009 12:46pm ET
James in your tasting highlights Napa Cabernet article today 7/14 you ask why the $275 price for the Paul Hobbs Beckstoffer Cabernet and state the reason is the price of the grapes. I understood it was the other way around, that the wine maker sets the bottle price and Andy Beckstoffer chargesx100/ton hence the $27500 price for the grapes.Just thought i'd read that somewhere...........
James Laube
Napa, CA —  July 14, 2009 12:59pm ET
John, typically the grower sets the price it's usually a negotiated price at which both the grower and winemaker agree. The formula I used is a general one, and the Hobbs price came from him.See: http://www.winespectator.com/Wine/Blogs/Blog_Detail/0,4211,171,00.html
David Mcgown
July 14, 2009 1:59pm ET
My local Costco hasn't changed the size of their wine section. The only change I have noticed is the selection doesn't turn over as quickly as it used to. And to Andrew's point, while you may not be able to call Costco a wine shop, I have on several occasions talked with the employees in my Costco wine department and received what I would call good service and advice. Meanwhile I find most of the real wine shops near me to be dramatically overpriced and snobby places that don't deserve my support. I tend to avoid them, do my own research, and then buy primarily from retailers like Costco and a couple of larger online merchants where I can get what I want at a better price.
Apj Powers
Dallas, TX —  July 14, 2009 2:12pm ET
JL: timely blog. I recently received a gift card to Costco. Never been but had always heard about their great wine dept. I was impressed w/ the selections, generally speaking, but surprised that it was such a small dept. This sheds some light. I do hate that most of their prices were below my restaurant's COST. Really hard to compete w/ that kind of buyer. p.s.-i often browse many stores' wine depts for the very same reason you mentioned
Dave Reuther
Deerfield, Illinois —  July 14, 2009 4:22pm ET
I haven't noticed any significant change at the Cosco near me. I always browse but only occasionally find a wine that I will buy.
Scott Vincent
Dalas, Texas —  July 15, 2009 12:15am ET
good blog, I was in Costco yesterday to buy more (or rather a case of Papa Luna - great table wine at a great price BTW) and I notice that the Plano, TX Costco that I shop had actually grown in size and selection, thank goodness...I asked the manager if it was me or is the selection getting bigger and he said that the store is stocking up due to the demand on the low cost wines....
Russell Quong
Sunnyvale, CA —  July 15, 2009 4:46am ET
As many have noted, each Costco seems to run their wine dept somewhat autonomously. The three Silicon Valley Costco's I frequent have significantly different wine selections. (And the San Luis Obispo Costco (Central Calif) continues to offer wines I've seen at no other location.) Now that you mention it, the more expensive wines at $60+ have largely been replaced with lower priced choices. But overall the selection has remained equally compelling.

I know this is maybe somewhat controversial view, but I believe an informed wine consumer looking for "value" wines could do quite well just buying from a few well-stocked Costco locations. I have certainly gotten many bargains there, including many WS Top 100 selections and low production bottlings (which appear at just one location). While I shop at many local wine merchants, the fraction of my purchases from Costco continues to slowly rise.
Tom Hudson
Wilmington, Delaware —  July 15, 2009 11:18am ET
We have lowered the inventory at my 76 seat wine bar due to the economy.In December, 2008, we offered 45-50 wines by the glass and our by the bottle list was 450. As of now, we are offering 30-35 wines by the glass and our bottle list is now at 400.The dollar value of our inventory is down by 25%, and we hope to lower it by another 25%. All of the wine is paid for and we need the cash flow from our inventory to help sustain the restaurant, with the sales/covers down about 30% since December, 2008.
Robert Dwyer
Wellesley, MA —  July 15, 2009 2:26pm ET
Just a point of clarification on Whole Foods in Wayland, MA. They stopped selling alcohol altogether yesterday, but it had nothing to do with the economy. They wanted to sell alcohol at their store in development in Dedham, and since the state limits any single retailer to 3 liquor licenses they evidently chose to stop selling alcohol in Wayland and instead sell it in the larger store coming to Dedham.
Tim Ballard
Gilroy Ca —  July 16, 2009 12:36am ET
There is a "pecking order" for Costco's in Cali- they have "premium sites" which obviously reside in affluent areas- Those are Danville, Almaden, Sand City (Monterey Peninsula), SF for NorCal. SoCal probably areas around OC and SD would get the top wines- b4 the recession hit. I have traveled to many different Costco warehouses in NorCal and Central Cal. Some have reduced the shelving available for wines. Most have reduced the top end wines which do not move these days- that is against Costco's business model ;-) The Costco in Sand City has a very nice gentlemen there which is quite knowledgeable on wines from all over the world...sorry Andrew M, wine service in a big box store :-(
Troy Peterson
Burbank, CA —  July 16, 2009 2:08am ET
Confirming with others that Burbank, CA (So Cal) is the same as it has always been.
Fred Taleghani
Palo Alto, CA —  July 16, 2009 5:15pm ET
Its interesting to see the variety of wines that vary based on some obscure demographics or perhaps buyer preferences. You will see first growths at the Redwood City, CA Costco, and a whole different selection at Mountain View a few miles down the road. I am a bit miffed however. If you look at thier website Residents of Washington State get a much better selection of wines online than the ret of us :(
Errol R Kovitch
Michigan —  July 17, 2009 9:27am ET
Southeast Michigan selections are slightly improved, but maybe only because the many 2005 Bordeaux aren't selling (or marked down). Lower priced wines seem to be selling. I would rate the selection an 83, nothing exciting.
Apj Powers
Dallas, TX —  July 17, 2009 1:26pm ET
Tom in Delaware: I feel your pain. We have done a similar downsizing of our list. Robert in MA: Good to know other states have kooky liquor laws as well. I thought it was just TX. Crazy
Ted Henry
Napa, CA —  July 17, 2009 1:39pm ET
John Stickler is absolutely correct. Beckstoffer charges bottle price x $100 for To Kalon. He also sets a minimum price of $40000 per acre that he calls "insurance" in case the client elects to drop a significant amounts of fruit or sets too "low" a bottle price.
Bill Dwyer
Southlake, TX —  July 19, 2009 12:49am ET
I shop for wine in three different Costcos. 80% of my cellar comes from there. They have knowledgeable people and clearly post ratings. If Wine Spectator has rated it highly, I know I am not overpaying at Costco (unlike most local competitive stores that charge 25% more) Since buying at Costco, I have broadened my wine tastings to numerous countries I'd had little experience with. Our selections have stayed the same with the Plano store having the best selection, 4 of the big racks. If you have the bank they always have a couple dozen wines in the $50+ range at the Plano store.
Sam Monteleone
Kansas —  August 3, 2009 9:11pm ET
Andrew I feel your pain.. I own a family run wine store and the Costco's and Sam's Clubs are killing us. I dont know how they do it but their wine is selling at my Cost to buy it from the State Distributors. We need more small business support. I agree with what you said. Soon everyone will buy from a monster chain and there will be no need for us small wine shops anymore.
J D Cahill Md
Jacksonville, FL —  September 23, 2009 1:14pm ET
The selection at the local Costco has changed very little. Some of their $30+ inventory with mid 80's ratings is getting stale, and it should. When they offer really good buys...'05 Ch. Ste. Michelle Indian Wells Merlot at $13/bottle...pallets of it are gone in days. If they have what you want, no one has it cheaper. Otherwise, I can order a case of my choice from the local Wine Warehouse for a reasonable price.

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