Wine upgrade to feature in Wal-Mart revamp

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An enhanced wine range is expected to be a key feature of a major revamp of Wal-Mart's discount stores as the retailer bids to increase consumer spend among existing customers and attract more middle and upper-income consumers through its doors. David Robertson reports.

Wal-Mart, the world's largest retailer, has begun a project to remodel and upgrade more than half of its US stores in a move that could have considerable benefits for the US wine market.

Although Wal-Mart rejects claims that it is going "upmarket", many of its stores will be given a fresher look and wider product range as part of the remodelling programme. Wine is one area expected to get substantially more shelf space, potentially introducing many new consumers to the pleasures of the grape and expanding the wine horizons of millions of others.

The "Out in Front" programme will see 1,800 of Wal-Mart's 3,000 discount stores given a facelift. Cosmetic changes will include wider aisles and lower shelves but many stores will also see their food and drink departments expanded.

The discount stores currently only stock basic food products, soft drinks and occasionally beer and spirits. But Wal-Mart wants its core lower-income consumers to spend more in its stores and one of the easiest ways to do this is to expand the food and drink selection.

Wal-Mart also wants to encourage more middle and upper-income consumers to shop in its stores and a wider selection of fresh foods, organic foods and wine is seen as a way to do this.

Not all Wal-Marts will make this change but those located in more affluent communities can expect a more sophisticated product range after the revamp.

Wal-Mart's larger Supercentres already offer a wide variety of wines and they give an idea of what is likely to become available at the more numerous discount stores.

Gallo provides the bulk of the Californian product, typically at about $6 a bottle, but Robert Mondavi Private Selection and Kendall-Jackson are also on offer.

Australian winemakers are surprisingly well represented with Lindemans ($6.50), Rosemount Estate ($9) and Yellow Tail ($6) all on offer. Most of the wines are in the $6 to $9 bracket but some stores offer bottles up to $400 in value.

With more than 100m Americans visiting a Wal-Mart store every week, the potential for introducing new consumers to wine is massive.

California Wine Institute communications manager Gladys Horiuchi said: "Wal-Mart is such a major distributor that if it expands its wine selection it will make big waves in the industry. It's another example of how wine is reaching the mainstream American consumer and that is why we have seen wine sales grow for the last 12 consecutive years."

Wal-Mart would not give details of how its wine selection will change after the remodelling or by how much its wine sales have grown in recent years, though industry rumour suggests they have increased substantially.

However, Wal-Mart spokesperson Karren Burk said: "In those locations that are licensed to offer alcohol, the offerings may range from selections that retail for several dollars to several hundred dollars. We will continue to evaluate the range of selections store-by-store and adjust it accordingly to best meet the needs of the customers in each community."

Wal-Mart is also testing other ideas to encourage wine consumption. An electronic display at a store in Plano, Texas, educates consumers on which wines go with which foods and if this proves popular it could be rolled out to the remodelled Wal-Marts as well.

Sectors: Wine

Companies: E&J Gallo

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