
DATE: Monday, June 16, 1997                 TAG: 9706140322

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

TYPE: SMALL BUSINESS 

SOURCE: BY AKWELI PARKER, STAFF WRITER 

                                            LENGTH:   92 lines

WINE WAR COMPETITION FROM BIG GROCERY STORES IS PUTTING SQUEEZE ON SMALL WINE SHOPS.

Wine shop owners are an affable bunch - they thrive on sending customers out the door satisfied, whether it means finding a vintage bottle for the connoisseur or helping the novice pick something to complement a special dinner.

But with wine's growing popularity, grocery stores are discovering the time is ripe to move in. No longer content to carry cheap ``jug wines,'' big stores like Harris Teeter and Farm Fresh are offering a wider and more sophisticated array of the elegant intoxicant.

That's putting the squeeze on mom-and-pop operators, who can't compete with the big stores' buying muscle.

``There's a ton of competition,'' says Jenny Foster, manager of Norfolk's West Side Wine Shop on Hampton Boulevard. The store competes with the likes of Taste Unlimited in Ghent and grocer Gene Walters' well-stocked racks - both just a few minutes' drive across town.

Tim Gudge and his wife Terry are closing their shop, East of Napa in Virginia Beach, after six years in business.

Reason: they were crushed like grapes when they couldn't compete in price with the local Harris Teeter.

``Our distributors are volume and price-discount oriented,'' explains Tim Gudge. ``A smaller retailer that may only purchase three to six cases per shipment can't compete.''

Mike Long, who recently opened his third wine store - The Pottery Wine & Cheese Shop in Hampton - thinks he has the answer to battling the big boys: diversification.

In addition to the expected complement of varietals and specialty microbrews, Long's store keeps inexpensive gift items, glassware and other wine paraphernalia, all placed to trigger impulse buys.

Another not-so-secret weapon: fresh sandwiches, salads and bread baked on the premises.

The higher profit margins on the non-wine items allow Long to charge less for the wine and compete with large discounters.

And he knows how the supermarkets think.

``My whole background has been in retail - since I was 16 years old bagging groceries,'' says Long.

He's served as an executive for Farm Fresh and the Williamsburg Pottery Factory, but was eventually overcome by the urge to be his own boss and bought a store a few years ago. A Richmond location followed, then the Hampton store.

The Pottery Wine & Cheese building's former tenant was also a wine merchant. George LeCuyer, an old master of the business who started selling wines from Easy-Go convenience stores, opened the Wine Street Gourmet in 1991.

``It was a hobby that became a monster,'' says LeCuyer of his entry into the business.

Although his operation made a profit, it eventually became a grind keeping a step ahead of the competition and LeCuyer retired.

Small retailers, he says, still have a few tricks up their sleeves.

For one, they don't have to answer to a corporate hierarchy and thus can afford to take risks and try new products.

``For example, specialty beers,'' says LeCuyer. ``We blossomed that long before the supermarkets knew what a microbrewery was.''

And they can buy from small-scale distributors who may be harboring wonderful but little-known brands, whereas big stores often rely on name-brand recognition.

Small stores can also leverage their superior product knowledge to offer customers better, more informed service than they'd get in a grocery store or discount club.

And there's diversification. Grocery stores themselves can afford to offer wine so cheaply in part because they split the margin on their vast selection of non-wine items.

Is it the beginning of the end for small wine shops?

Not if owners are on their toes, says local wine consultant John Keating. ``Some of the most successful wine and cheese shops in Tidewater are those who do a lunch business or catering,'' says Keating.

``The higher percentage that you try to devote to selling wine, the higher percentage that you'll go out of business,'' he says.

East of Napa's Gudge concedes that diversifying might be the way to go, but chose not to with this shop. But he says he isn't ruling it out for the future - wine is in his veins and he'd like to get back into the business. His family owns a couple of labels in California.

``Wine is a lifestyle,'' says Gudge. ILLUSTRATION: [Color Photos]

HUY NGUYEN

The Virginian-Pilot

Where's the best place for a wine shop? Wine Street in Hampton is

where Mike Long desided to open his third store, The Pottery Wine &

Cheese Shop. His stores stay afloat by offering a diverse range of

products, including gift items.

Since man cannot live on wine alone, The Pottery Wine & Cheese Shop

attracts customers by also offering sandwiches, salads and fresh

bread.