Michiganians cut back on liquor and beer

Michiganians are still drinking, but they're not buying as much beer and liquor, and are opting for cheaper brands.

Retail beer and liquor sales across the state are slipping, bucking a slight rise in both nationwide.

Wine sales are the one bright spot for spirits, with sales in Michigan up about 10 percent this year, a spike industry analysts attributed to more people cooking and entertaining with wine and drinking cabernets and merlot for health reasons.

Beer sales in the state are down 2 percent and liquor sales -- with the exception of gin and vodka -- are down 6 percent, according to the Michigan Food and Beverage Association.

Industry experts attribute the drop to the changing habits of penny-pinching consumers, who are shopping for cheaper brands and buying alcoholic beverages at stores with better prices. They're also entertaining more at home instead of going out to bars and restaurants.

"Our volume is the same, but sales of the high end stuff have slowed," said Kelly Denha, owner of the Wine Palace in Livonia. "People are still drinking, but they're drinking less expensive stuff."

Retailers are hoping a rush of revelers will snap up champagne and other libations as the clock ticks toward midnight. The traditional flurry of sales leading up to New Year's Eve hasn't happened -- yet.

"Customers are waiting until the last minute to see how their finances are," said Nash Kannou, a manager at Forest Liquor in Detroit.

A national survey by the Nielson Co., a marketing information firm, found that while alcoholic beverage sales aren't recession proof, they can be considered recession resistant, meaning sales take some hits but are generally stable. In a study released last month, the company found that nationwide sales of beer, wine and liquor were up slightly.

"Generally, there is a much larger emphasis on value," said Danny Brager, Nielson's vice president of beverage/alcohol. Consumers, he said, "are buying less expensive products generally, and in more value-oriented channels. Additionally, consumers are going out to eat and drink less, and staying in and entertaining at home more often."

Wholesale increase reported
The Michigan Liquor Control Commission said wholesale liquor sales to retailers, bars and restaurants are up slightly this year, but retail sales don't reflect that increase. Ed Deeb, president of the Michigan Food and Beverage Association, said the discrepancy could mean stores are stocking up but not necessarily moving inventory. The commission does not track wine and beer sales.

Across the state, wholesale liquor sales are up 3.4 percent this fiscal year, which ended Sept. 30, and the number of cases of liquor sold is up 2.2 percent. October and November sales stayed the same as last year.

"Ours is a stable industry," said Mike Lashbrook, president of the Michigan Beer and Wine Wholesalers Association. "Sales and employment are stable and continue to be a strong economic engine."

Sales reports are mixed
Beer, wine and liquor retailers in Metro Detroit said sales have been all over the board. Some said sales are flat or down, while others have seen slight rises in some items.

Sales at the Wine Palace, for example, are healthy, but owner Denha noted many customers are choosing cheaper beverages. Customers who used to buy a $300 bottle of Cristal champagne or a $129 bottle of Dom Perignon are opting for bottles of $40 Moet & Chandon. Many patrons have told him they plan to stay at home and celebrate the New Year with family and friends to save money.

Liquor sales at Forest Liquor in midtown are down, even though manager Kannou sees a steady stream of customers. Sales are down 20 percent because customers are buying lower-end beverages.

At Cost Plus Eastern Market Wine Warehouse, owner Dan McCarthy said sales have remained stable, though customers are choosing lower-priced wine to entertain at home with family and friends.

"The days of dropping $200 or $300 for dinner -- those days are over," he said. "People have money. They're just not spending it foolishly. They're looking for a bang for their buck, and you better give it to them."