In faltering economy, cheap liquor sales up

BY CHRIS CLARK | APRIL 01, 2009 7:40 AM

When UI junior Lauren McSweeney walked into Liquor House to pick up a bottle of vodka, her eyes moved down from the shelves of Grey Goose, Absolut, and Three Olives to find something a bit more affordable: Hawkeye vodka.

“When you’re mixing alcohol, the quality makes less of difference,” said Jim Funcke, the manager of Hy-Vee Wine & Spirits in Coralville, who said he has recently seen the popularity of low-cost liquor growing.

Cheap liquor has historically been popular among college students, but as the economy continues to suffer, the top shelf is becoming overcrowded with a surplus of premium and luxury liquors.

More consumers are deciding to drink low-priced alcohol; sales of vodkas costing between $6 to $9 per bottle have increased 14 percent over the last year, according to Information Resources, a market research firm. Similar trends were observed in other types of alcohol as well.

Funcke said he thinks the recession is forcing people to spend less money on alcohol.

“There has been a slight increase in the number of people buying cheaper alcohol,” Funcke said.
Unless she is celebrating a special occasion, McSweeney said, she and her friends look for the most beer at the lowest price.

“A lot of my friends have just been going for the Keystone,” she said. “Whatever I can do to save some money is helpful.”

UI junior Lucas Lindstrom said he is much more conscientious about his spending when buying drinks at a bar than he is in a liquor store.

“Instead of spending $5 on a Captain and Coke, I would gladly take a well substitute and just order a rum and Coke,” he said.

But when shopping in a liquor store, he said, price isn’t as much of a factor.

“It depends on the occasion,” Lindstrom said. “For the most part, I try to stick to Budweiser and Anheuser-Busch products, but it depends on how I will consume it.”

Doug Alberhasky, the manager and “bier guy” at John’s Grocery, 401 E. Market St., said he has seen a contradicting trend: His customers focus on the quality of the beer rather than the quantity. For Alberhasky, taste — rather than effect — is a fundamental difference in the store’s selection of alcoholic beverages.

“Around here, it’s about the quality and value,” he said. “Educated customers who appreciate what they’re drinking are going to continue drinking the same thing.”

But some consumers aren’t only trying to save money on beer and hard liquor — they are also looking for good prices on wine.

In Coralville, Funcke said low-priced wine is even more popular among value-shoppers than other types of cheap alcohol.

“It’s the $5 bottle of wine that’s really flying off the shelf,” he said.

Alberhasky said the average bottle of wine in his store is between $9 and $11.

“We can’t seem to keep that stuff in stock, because there are some that could go up against a $20 or $30 bottle of wine any day,” he said.

Although Alberhasky recognizes price can motivate a consumer’s purchase, it shouldn’t be the determining factor.

“Educated customers are people who really appreciate what they’re drinking,” he said. “Those are the kind of people who will be able to find that diamond in the rough.”

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