How Tennessee Liquor Stores Are Preparing To Take On Groceries In 2016

Brassy jazz standards. Busy cash registers. The crinkle of bottles being wrapped in brown paper bags. Walk in the front door of Red Spirits & Wine in Bellevue, and you’re immediately hit with the holiday rush.

This is the busy season for liquor retailers. Open houses, Christmas gifts, family visiting from out of town — they’re all reasons to stock up on booze.

But the shelves in many Tennessee liquor stores don’t just contain alcohol these days.

“A lot of it’s gift-oriented items,” says Red Spirits manager Eric Nichols. “Some really nice recipe books, cookbooks … The Wine Bible, things like that.”

Grocery stores in Tennessee have been counting down to July 1, the day they’ll finally be able to sell wine. Meanwhile, liquor retailers have been hard at work figuring out how to cope with the increased competition.

Red Spirits has been experimenting over the past 18 months with everything from limes and lemons to $200 decanters. Nichols says the store’s approach has been primarily trial and error.

It’s all new stuff. For decades, liquor stores operated in a world apart. Grocery stores could sell beer, but nothing harder. Liquor stores sold wine and spirits. Nothing else. Not even a corkscrew.

Tennessee is finally changing all of that. A law passed in 2014 lifted many restrictions on liquor stores and opened the door to grocery stores’ selling wine (though still not liquor).

But as always with liquor laws, the transition hasn’t been neat. Grocery stores have to wait until July 2016 to start wine sales, effectively giving liquor stores a two-year head start to figure it all out before they go toe-to-toe with the chains.

Red Spirits has advertised a lot to make sure people know they now sell more than wine and liquor. Its billboards tower over Interstate 40 on the way into Bellevue. The store is also a WPLN underwriter.

Nichols says revenue from merchandise won’t totally make up for the wine sales it’ll lose to grocery stores. But items like drink mixers and glassware do take liquor stores closer to being one-stop shops.

The Fight for Shoppers

One afternoon last week, Bellevue resident Deborah Kemp was stocking up for holiday entertaining and gift-giving. Their purchases included bottles of wine, triple sec and Irish cream.

Kemp says she visits the liquor store about once a month and probably won’t change her habits much when wine becomes available on grocery store shelves.

“I think there’s enough business for the establishments like these as well as the grocery stores,” she says. “So, I’ll still come to this store.”

Liquor stores will see in 2016 if they can hang on to people like Kemp, or if they’ll lose those customers to the grocery stores down the street.