A month after the privatization of liquor sales began in Washington, two liquor kingpins are open for business in Tacoma, and they’re located right across the street from each other.
Costco Wholesale spent more than $20 million last year on Initiative 1183. The measure passed, and California liquor retailer BevMo is now taking full advantage.
“I think everybody owes Costco a big thank you,” said Alan Johnson, chief executive officer of BevMo. “They did a terrific job of sponsoring this (initiative).”
BevMo recently opened its first store in Washington, located at 2330 37th St. S.
The inventory and services provided by the two companies are drastically different, and the stores attract different types of customers.
Those looking for most volume for their money may seek a half-gallon of Kirkland Signature liquor from Costco. But for those looking for the right wine to pair with a steak, BevMo might be the place to go.
The News Tribune compared prices at the two stores after BevMo opened on June 27. While their prices were similar a week ago, by Monday Costco was charging several dollars less than BevMo for each of the nine types of liquor checked.
Costco’s strategy in liquor retail parallels the rest of its vast inventory: selling recognizable brands at affordable prices, according to John McKay, executive vice president of the Issaquah-based company. “Top selling brands and primary items is where the demand lies,” McKay said. “The same applies for spirits, just like everything else.”
And just like with other merchandise, Costco is aware of their competitors’ prices. “We’re responding to competitors all over the map, and we’re always trying to negotiate better prices,” McKay said. “What you’re seeing is the effect of a competitive marketplace. ... If anything, you’ll continue to see prices go down.”
The Tacoma BevMo may be close to Costco in a physical sense, but the companies’ business models are miles apart. “I think they (Costco) do a terrific job at what they do, but it’s different than what I do,” Johnson said.
Unlike Costco, BevMo sells spirits in quantities other than 1.75 liters, which is approximately a half-
gallon. And while Costco focuses on proven products, BevMo is busy searching for the next big thing.
“We are the headquarters of innovation,” Johnson said.
BevMo’s focus on innovation is aligned with its desire to serve the local community. Johnson said in Washington that means keeping a range of regional brews, wines and spirits in stock.
“There’s no such thing as one size fits all at BevMo, we think about things locally,” Johnson said. “We want to position ourselves, as a brand, as the neighborhood beverage store.”