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1.
COX'S SMOKERS OUTLET:
LEVERAGING LIQUOR
About 30 percent of the business across Cox’s Smokers
Outlet & Spirit Shoppes based in Louisville, Kentucky is
now in liquor sales, according to Bill Grantz, owner and
partner. The eureka moment for Grantz came in 1997,
when a liquor store next to one of his tobacco stores
went up for sale. He obtained a liquor license, knocked
down a wall and started his first tobacco/liquor shop.
“I saw that cigarettes weren’t going to be as profitable
anymore, and liquor offered the sales we were needing
and hoping for,” he tells
Tobacco Business
. “The combina-
tion of the two worked well together for us.”
Today, Grantz considers his 14 of 18 stores with liquor
to be “more like convenience/liquor/tobacco neighbor-
hood-type locations.” He explains, “we have big-box
competitors in liquor, but a lot of our stores have drive-
throughs, and we’re able to compete as more of an ‘in-
and-out’ type retailer.”
For reference, margins run about 20 percent in hard
liquor, 25 percent in wine and 13 percent in beer.
Grantz cautions that every state is different on alcohol
rules and regulations. “In our state, you can’t sell alcohol
below your cost, but the more you buy, the better price
you get, so we run sales on alcohol based on special pur-
chases we get from distributors, thanks to our multiple
number of stores selling it.”
Cox’s creates its own in-house signage and typically
promotes at least one liquor, one wine and one beer for
four to six months, depending on what distributors are of-
fering price-wise. “If they’re wanting to move Yellow Tail
wine, then they run an extra special promo on that, and
we usually pass that on to customers,” Grantz explains.
Grantz had to learn one lesson in alcohol sales the hard
way, he says. “We started to run our rewards program,
which we offer on cigars, with alcohol as well; we didn’t
know you couldn’t do that here. We got cited and they gave
us a warning, so we dropped alcohol out of the program.”
Nevertheless, Cox’s sells a lot of cigars and alcohol
together, according to Grantz. “We see that a lot of
bourbon lovers are also cigar lovers; we see a lot of bas-
ket-type sales where you get multiple purchases like this.”
For that reason, the chain will hold some cigar events
where it will have bourbon tastings, too, but those can’t
be in-store. In the store, it will hold “liquor and wine
tastings all the time without cigars involved; we can taste
indoors, but can’t smoke indoors, even in a tobacco
store,” says Grantz. “We usually invite one of the liquor
distributors in here for this. We generally have the tasting
events twice a month and it’s a lot more regular during
holidays and Kentucky Derby time.”
Cox’s regularly merchandises some exclusive bour-
bons that are more than $300. “We don’t do a big vol-
ume in it, but we have some special stuff that we get our
hands on and proudly display,” Grantz reports. Like any
other store that sells alcohol, Cox’s “sweet spot” on 750
ml of bourbon is typically in the $25 range, he adds.
Another avenue of opportunity for Cox’s to get the
word out about its liquor/cigar sales is through its mem-
bership in a local Louisville group that holds “Buy Local”
events. “A few times a year, local businesses like ours are
invited to promote our products and promotions, typical-
ly during the spring and summer time, where food and
restaurant events will be incorporated,” Grantz explains.
“It has helped our image as a locally owned retailer versus
some of our bigger corporate competition in the area.”
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