Interview: Annette Alvarez-Peters Of Costco

Sep 30, 2014

(SND) - Beverage alcohol accounted for $3.1 billion of Costco’s sales total of $102.9 billion in its fiscal 2013 (September 2012-August 2013), with all three sectors showing healthy growth. Wine is leading the charge at 50% of beverage alcohol sales, with spirits taking 30% and beer 20%. SND recently caught up with Annette Alvarez-Peters, Costco’s assistant general merchandise manager for beverage alcohol, to get an update on trends at the retail giant.

SND: How has the beverage alcohol department been performing at Costco?

Alvarez-Peters: We’re quite pleased with the performance this fiscal year. We’re seeing our biggest gains in spirits and wine, and we’re trending above the industry. As expected, sales in Washington are challenging, due to onerous fees and taxes as well as very aggressive competition. But I would say our top markets still include Washington, as well as Wisconsin, Indiana, Illinois, California, Florida and Washington, D.C., to name a few.

SND: What buying trends are you seeing in stores?

Alvarez-Peters: Large-format beers and ciders are doing well. Vodka and whiskies also continue to do well. Our top spirits sellers are (Costco private label) Kirkland Signature American vodka ($13.99 a 1.75-liter), and Jack Daniel’s Tennessee whiskey ($29.99-$43.99 a 1.75-liter). High-end spirits, notably Johnnie Walker, are also doing well. This fiscal year we’ve sold a number of The Macallan 60-year-old ($16,000 a 750-ml.), The Macallan 62-year-old ($19,000 a 750-ml.), Johnnie Walker’s The John Walker ($2,700 a 750-ml.) and Rémy Martin Louis XIII Cognac ($5,300 a 750-ml.). We have a very affluent member base, which is a big reason we continue to grow the beverage alcohol department. Our members’ average age is 52 and average household income is $94,000, with more than 33% of our members making more than $100,000 annually. And we have a wide range of shoppers at Costco, from everyday casual drinkers to collectors.


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