Are People Buying Expensive Wine Again?0
Is it possible? Is it true?
If the last three weeks are any indication, then yes, it’s true! Not wanting to believe our own press, I’ve been asking owners I know of other local businesses and they too are reporting an uptick in their businesses in the last three weeks too. Finally!
So what’s attributing to the change? I have no idea, but perhaps people are feeling better about our economy and are starting to loosen up a bit? This is great news as we head into the biggest season of the year for buying wine – the fourth quarter holidays. I’m just hoping that the press doesn’t screw it up by reporting only negative news instead of good news like this.
So what about my initial question – are people buying expensive wines again? Yes, but only if they’re being offered at big discounts. Thankfully, wineries are getting it – they have to move their wine and right now the only way to do that is to discount it. Which leads me to the debate of whether or not discounting hurts a brand.
When we talk to the distributors and the wineries, discounting is a big concern. They’re afraid that if they traditionally sell a wine for $100, discounting it to $50 will hurt them as they won’t be able to raise the prices after the economy get’s better. I say “Hogwash.” Consumers today are demanding discounts on everything from everyone, so why would a winery think they’d be any different. Discounting isn’t about establishing a new price level for a particular wine, it’s about giving the consumer a deal because they can demand it today. Customers knows that this is a short lived situation and when times get better, they’ll have to go back to paying the higher prices. But for now, those with cash love getting the deals.
I don’t know if anyone else remembers this, but right after 9/11 happened, American’s stopped buying wine then too. Wine retailers had to resort to selling wines at a steep discount then just to survive. I was one of those lucky people to have cash back then and bought lots of wine at steep discounts. But I never expected to be able to continue to buy at those prices. It was merely a point in time deal and you took advantage of it – period. And you guessed it, I bought the wines later at their “normal” prices because I still wanted the wine. And look what happened to those retailers then; those that survived went on to have an 8 year run of highly prosperous times. Wines that were discounted then went right back up when they could. And it will happen again now.
History is about teaching us lessons and the message here is clear – mark it down, get cash flow moving again and move on. Don’t worry about brand dilution Mr. Winery owner – I for one think its a big deal about nothing. It’s about survival.
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