PLCB thirsts for more sales

The Pennsylvania Liquor Control Board racked up a record $1.7 billion in sales in the 2006-07 fiscal year.
 
Yet the PLCB isn't satisfied.

It plans to become a "world-class retailer" of wine and spirits. It's obtaining guidance from Landor Associates, one of the world's leading "branding" firms, with clients including Microsoft, Pepsi and Levi's.

Under a two-year, $3.6 million contract, Landor will figure out where the PLCB falls short in areas ranging from store layouts to advertising to public image.
 
By summer, San Francisco-based Landor is expected to provide recommendations for physical makeovers of Wine & Spirits Shoppes.

Renovations of some stores could begin late this year, PLCB chairman Patrick "P.J." Stapleton said.

Given the monopoly and record sales of 2007, and the moral and health issues surrounding booze, why should the state spend millions to figure out how to sell more of it?

Stapleton said his mandate from Gov. Ed Rendell is, "Run this place like a business, not a government bureaucracy."

The branding and store makeovers will likely increase sales, Stapleton said. But he said PLCB has no specific sales targets.

The people who control wine and liquor sales in Pennsylvania are hardly clueless about their customers.

They know the state has 71 stores in areas where the average family income exceeds $100,000 and patrons buy mostly fine wines and vodka.

They're equally familiar with the 33 stores in areas where many customers haven't finished high school, make less than $50,000, and prefer brandy, cognac, rum, gin and flavored wines.

Customers spend an average of about eight minutes inside a state store, Stapleton said. That's much less time than people spend in other specialty stores.

The PLCB wants to increase that time, and entice people to "buy up" in terms of quality.

Current shelf layouts don't accomplish that, Stapleton said. For example, it's not wise to put vodka next to gin, because people who drink one usually don't like the other, he said.

A better strategy, Stapleton said, is to keep the items separate and surround them with the ingredients of popular cocktails, with shelf tags telling people how to make the cocktails.

Landor has surveyed state store customers.

The most important findings, Stapleton said, are that customers feel the selection is too limited and too expensive.

But both are misconceptions, Stapleton said. The PLCB offers more than 25,000 products.

Not all are available in any one store, and some stores offer far less.

Part of the problem, Stapleton said, is that many people don't know they can place a special order at the store or on the PLCB's Web site and then pick it up at their local store.

Wine and liquor undergo a significant markup in Pennsylvania: a 30 percent PLCB markup, an 18 percent liquor tax and a 6 percent sales tax.

But Stapleton said Pennsylvania, with its huge bulk purchasing power, offers a good deal compared to most neighboring states except for Delaware, where booze isn't taxed. 

He contended that Pennsylvania prices, as a whole, beat West Virginia, Ohio and New York. And Pennsylvania is competing with New Jersey and Maryland after discounting border stores that offer lower prices than the rest of the state, he said.

Still, the Landor effort won't address a common complaint about Pennsylvania liquor sales: that people must go to a state store, beer distributor and bar rather than buy alcohol at a grocery store, as in many other states.

Stapleton said the effort focuses on working within the state's existing sales framework. Any changes on where and when alcoholic beverages are sold are a matter for the state Legislature, he said.

Not everyone agrees it's the proper role for the state to seek to maximize booze sales.

Rebecca Shaver, the executive director of Pennsylvania Mothers Against Drunk Driving, said the organization has a good relationship with the PLCB and values the controls it places on alcohol sales and its efforts to educate people about alcohol abuse.

But she believes state stores are sufficiently appealing, and there's no lack of advertisements for alcoholic beverages.

"There's a lot more surrounding the sale of alcohol than any other product. This is a very addictive product, and when not consumed responsibly, it can kill people," Shaver said.

Asked how the PLCB knows when it sells too much booze, Stapleton said, "I guess that's a question better posed to our consumers."