Friday, January 3, 2014

Deals! Wait. Deals?

Happy New year everybody.  Hope you had a safe and relaxing bon voyage to 2013 and a smiling start to 2014.

A quick peek at the blogosphere indicates that the flood of 'Year Ahead Predictions' articles is now as standard as the 'What to Drink On Thanksgiving' and 'Top Wines Of The Year' pieces.  Making bold predictions without consequence is awfully tempting, so don't be surprised if you see one of those here soon.  Hell, who doesn't want to play weatherman for a day?

For the time being, though, you may have noticed something peculiar at your local wine shop or grocery store as the dust is beginning to settle on the New Year.  EVERYTHING is on sale.  Check out the yellow sale tags on the shelves below.  Lonely are the bottles that aren't sporting the eye-catching shelf ornaments. 

I like to be a bottom feeder when it comes to shopping for most luxury items (especially wine), so I pay close attention to circumstances adversely affecting merchants whose products I want.  Sometimes these circumstances are as simple as lackluster demand, other times it's a pricing error, and sometimes it's even the unfortunate situation of a player going belly-up.  Whatever the reason, I love a good deal as much as the next guy/girl.  So, sale tags everywhere gets my attention.

Which is the point.

It's a poorly kept secret that the holiday season fell short of wine marketers' expectations and, knowing that, you might be inclined to believe that prices are indeed compensating.  But before we bust open that leftover Champagne, a closer look reveals the fallacy.  Almost every one of those bottles has what I call a "fake sale" label on it.  A fake sale is when a bottle of Wine X that has been priced at $14.99 all year is simultaneously marked up to $21.99 and marked down to $14.99, often touting the huge savings - "Save $7.00!"

Marketers know full well that they can't sell any of Wine X at $21.99, but they also know that the "Save $7.00!" tag is an effective enticement to distracted/ill-informed consumers.

Don't be that consumer.  Ignore the sale tags and keep your BS sniffer tuned up. There's a ton of unsold sparkling wine out there that no one wants to warehouse until Valentines Day.  Same goes for trophy wines that didn't sell as gifts at Christmastime.  But that doesn't mean that the distribution channels are willing to trade time and space for margin.  If they think can get both, you can be sure they'll try.

And with that, I'll make my first predictions for the New Year ahead: while the craft beer Renaissance will attract exponentially more new drinkers than wine this year (thanks to a relative absence of elitism, wide distribution of even the smallest production products, and prices that wine just can't compete with), wine producers/wholesalers/retailers will continue to (try to) pull the wool over our eyes with these so called "SALES".  Prices aren't actually going to change, except to creep up - not down.

Happy shopping out there - and stay warm!


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