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Kistler -in Costco?
Sure nuff, I saw two bottles of 2000 Vine Hill for $80 today. Not a particularly great deal - Wine Searcher shows a couple of places significantly cheaper, but what the hell is Costco doing with a highly allocated wine like Kistler? Also saw 2001 Sassicaia in a couple of different stores recently. http://scmwine.wikispaces.com http://scmwine.blogspot.com http://blogs.sun.com/davetong http://twitter.com/davetong |
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Forgot to give the details:
892101 Kistler Vine Hill 2000 - $79.99 Costco, Mountain View. http://scmwine.wikispaces.com http://scmwine.blogspot.com http://blogs.sun.com/davetong http://twitter.com/davetong |
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Kistler is not quite as exclusive as it used to be.
___________________________________________________ It's good to try them young too and then let them age - James Suckling Infanticide can be very satisfying - Robert Parker I drink mine young to avoid disappointments - James Laube |
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Not true, nothing has changed at Kistler. Costco got tired of being denied highly allocatted wines and they are now buying them from private collectors. The proof is in the sell price, check the winery release price and then there shelf price, substantially higher. Costco works on a maximum of 14% profit. The single vineyard wines are not in wholesale distribution. I am 100% positive on this. When you see Kistler on the shelf, the tip off is always going to be the sell price.
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I think you're wrong. Costco couldn't give a cr@p about "being denied highly allocatted wines". Costco cares about moving product; doesn't matter whether that product is food, wine or cat litter. They deal with big numbers and there's no way that they would bother with the odd case from a private individual. It must have come from a wholesaler. On a seperate note, does anyone have any friendly contacts in Costco? Powell? I'd love to know what the * means on the Costco "shelf talker" - some wines have it, others don't. What does it indicate? Is it related to the $XX.97 price tag? Also I have been collecting the item numbers of certain wines. I'd love to know why I've got up to four different item numbers for some wines, eg Leoville Barton (perhaps different vintages?) but only one number for others eg Penfolds Grange (they appear to use the same number for every vintage). Has anyone seen 02 Leoville Barton or the latest releases from Penfolds in Costco (especially CA) yet? http://scmwine.wikispaces.com http://scmwine.blogspot.com http://blogs.sun.com/davetong http://twitter.com/davetong |
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Dave,
I have a friendly contact at Costco, but he's out of the country until June. I'll check with him when he returns. ---------------------- 2008 - the end of an error |
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I'm pretty sure I saw the 99 Grange last week near me. IIRC was about $200-$220.
I don't know what the * means. I love that xx.97 tip though. ******* We'll get 'em next year! |
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Doug
You are mistaken. To begin with the current release is 2002. The winery release price for these wines were aprox. $60. if they got the wines through a distributor the price would be no higher than $46. Keep in mind Costco does not sell wine for more than 14% profit The Henry Wine Group does not get single vineyard wine, nor does any other distributor in the country. Large buyers on the winery's mailing list are forced to spend big bucks to get the single vineyard Pinot's. The tip off is always going to be the sell price. Oh, yes the Costco manager admitted to someone in the business that's what they do. Obviously I am a bit more informed on the subject than I let on, I choose not to name names. I do brand manage Kistler for Southern Wine in Florida, this is not a new issue. REMEMBER the price is the tip off. When was the last time you bought somethung at COSTCO that was over 30% over the retail price. |
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Who's Doug?
Jimmy- are you sure about that 14% profit margin? If so could you please tell us your source (in general, no need to name names). I'm sorry, but I find it hard to believe that the Kim Crawford 2004 SB I've seen for $16.49 at one Costco was bought by them for $14.46 (this would represent a 14% markup), especially since I've bought this wine from regular retailers for about $12, as well as from other Costcos. I guess they might be going to the Binnys around the corner and the after-tax price is about $14.46, it's just that that sort of thing is illegal in Illinois. There are many other examples of this (2001 Ausone $229, 1999 Grange $210ish just to name a couple). The math doesn't work, so please state your source. ******* We'll get 'em next year! |
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What does the $xx.97 price tag indicate?
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Does anybody know why bottles cost different prices at different Costco's?
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Generally, Costco does not mark up items more than 14%. It is a corporate policy to ensure the merchant buyers at Costco are focusing on inventory turns and moving merchandise. (i.e. finding great buys)
Surprisingly, a high percentage of their annual profit comes from selling memberships. When they only make 14% average gross margin on goods most of that cost is offset by SG&A expense managing the business plus returns. The membership fees generate a high percentage of revenue even though they are a small percentage of net sales. I feel like I'm at work....back to wine. ------------------------------------------- Void where prohibited Member FDIC Batteries not included ** = spicy entree |
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isnadd- the 14% may apply to general merchandise, but does it really apply to wine? Markups are usually much greater than that at other retailers, and while costco wine prices can be good, they're not always that good. I'm very suspect of that 14% number for wine.
******* We'll get 'em next year! |
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Today at the Oakbrook, IL Costco:
1990 Pommery Cuvee Louise Champagne $29.99 Sorry guys, they only had a single bottle that was probably found in the back room or something. The bottle looks perfect anf for $30 figured it was worth the shot. |
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I'll be Doug.
I don't have any real doubt about the 14% margin. I find that very believable and consistent with what I've seen generally. I just don't believe the assertion that Costco are buying wine directly from private individuals. I cannot see any reason that they would do it; certainly not because they are in any way annoyed at not being able to obtain allocated wines. Clearly at $80 the price is way over release price and more expensive than some other retailers, so I'm assuming their wholesaler obtained it from a private user and passed it on to Costco. Kim Crawford SB is $12.69 in the Bay Area, whereas everywhere else it's $14+. Why would Costco in Illinois buy retail and then re-sell even if it were legal? That makes no sense. There has to be a simpler explanation. http://scmwine.wikispaces.com http://scmwine.blogspot.com http://blogs.sun.com/davetong http://twitter.com/davetong |
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The funny thing is, Dave, that the $16.49 price is at one Costco (Niles, IL), but I've seen it 15 miles away at another Costco (Chicago) in the $12s.
Jimmy- no answer yet? Are you still out there? ******* We'll get 'em next year! |
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Grossie, not sure about their markup on wine, I just know that that 14% applies to much of their merchandise. Based on their mix it seems that each store has their own liquor strategy. ------------------------------------------- Void where prohibited Member FDIC Batteries not included ** = spicy entree |
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I have read articles in the local and business sections of my newspaper that focus on that very issue. They made a point of stating that wines, like everything else in there, are no more than 14% above cost. That's why the local wine shops were upset with them. (Though I don't know why they should be. Costco only offers a couple dozen choices. I get much more from my local wine shop.)
I think the price difference between Costcos might be explained by the local liquor taxes. In some states they may vary from county to county. Who knows? *********** "Never RE-elect anybody." --Keith Squier |
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Grossie-
others have mentioned the 14% number, it is no great secret. Telling you how I know is not the issue. As to the difference in prices between states you need to keep in mind that there are different distributors in each state, different tax structures and transportation costs. Additinally producers and marketing companies do run promotions from time to time in an effort to move more product and get a larger piece of the pie. My local grocery runs Cherios for $4.79 a box, and occasionally they run a buy one get one free. The supplier helps to make that happen, usually not the grocery store. That sort of thing happens all the time in many businesses. Additionally many suppliers push there distributors to sell more product during a certain time period, towards that end many distributors might dump inventory at a reduced price in an effort to make a number. It happens in varios businesses, it's nothing new. |
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Jimmy- You stated the 14% rule as if it was a matter of fact with wine, I was asking you to substantiate that and you tell me that it's true because someone else said it too? It just doesn't wash with me, I'm too skeptical. Can you say that you see all the wines you've sold to Costco and they're always only marked up 14%? How do my examples fit in here? - the Kim Crawford at 2 stores in the same county at different prices, or countless other wines at full retail prices? Is costco overpaying for these wines or are all the other retailers only marking them up 14% too?
You obviously have an interest in protecting the exclusivity of Kistler (as their brand manager at Southern Wines). You show up on this forum only to defend Kistler, and tell us things that you are "100% sure" of (Kistler is not in wholesale distribution.). I understand where you're coming from, and maybe you're not intentionally misleading anyone, but perhaps you are not totally informed on this. ******* We'll get 'em next year! |
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Nevermind the Kim Crawfords at two different prices in two different stores. At my local Costco last week, the Kim Crawford was in two bins, right next to each other...at different prices!
Same wine, different product numbers, one at $13.xx, and the other at $16.xx, in bins right next to each other. How does that happen!? _______________________________________________________________________ Wine is passion. It is family and friends, warmth of heart, and generosity of spirit. ~ Robert Mondavi |
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AllRed - something like that isn't as unthinkable as it seems with regards to a big wholesaler like Costco... most likely there was just some misinformation in the procurement process of the wines, maybe even 2 different product codes, or another possible explanation, they were purchased at 2 seperate times, so the wholesale price from one lot was different than the other, and Costco is covering it's margins, or, etc...  sorry, Purchasing is my area of occupation - in the scheme of things, that's a smaller issue |
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