Prices plunge, sales slow as the slump takes aim at wine
I sat down to read the Sunday S.F. Chronicle yesterday and, as is my habit, began to separate the sections I like from the advertising sections which I have no interest in and put right into the recycling bin. But then one of them caught my eye. It was from Cost Plus, the chain store. On the back of the supplement they were advertising “Our Biggest Red Wine Sale Ever!” and I saw lots of familiar bottles, because I had reviewed most of them for Wine Enthusiast.
The prices seemed a lot cheaper from what I remembered, so I went into the magazine’s database and looked up the suggested retail bottle prices the wineries had indicated when they sent me the tasting samples. (In the interests of transparent disclosure, most of the wine I review is sent to me, unsolicited, by the wineries.) Sure enough, the prices Cost Plus was advertising were much, much lower than the SRPs from the wineries. Check it out.
Chateau St. Jean Cinq Cepages. SRP $75. Cost Plus price: $50. Discount: 33%.
Simi Alexander Valley Cabernet Sauvignon. SRP $26. Cost Plus price: $17. Discount: 34%.
Blackstone California Merlot. SRP: $12. Cost Plus price: $7. Discount: 41%.
Michael David 6th Sense Syrah. SRP: $17. Cost Plus price: $11. Discount: 35%.
Castle Rock Mendocino Pinot Noir. SRP: $12. Cost Plus price: $9. Discount: 25%.
Admittedly, the SRP that wineries list for new releases is often higher than what many people will ultimately end up paying. That’s because the wineries figure customers who think a wine will cost $25 will be pleased when they find it for $21 and thus more likely to buy it — whereas if the customer thought the wine cost $21 and then discovered it was $25, she’d be less likely to buy it.
But in my experience the difference between SRP and average shelf price is maybe 10% or 15%, tops. So what’s up? Either Cost Plus is desperately trying to move inventory even if that means taking a profit hit, or the wineries themselves are trying to move inventory by lowering their prices to Cost Plus. Maybe it’s a combination of the two.
Either way, the extent of the price discounts is shocking. But this news is pretty shocking, too. There is “a worldwide drop in champagne consumption for the first time in almost a decade,” the Comite Interprofessionnel du Vin de Champagne reported last week.
Are these two things related? Yes. Are they temporary blips, or two canaries that just dropped dead in the coal mine? I don’t know.