Home > Uncategorized > Is the wine biz up or down…make up your mind!

Is the wine biz up or down…make up your mind!

Ok, on the one hand, retailers are 2% up from last year.  On the other hand, consumer spending is down.  Cognitive dissonance?

Consumer spending slowed in June | Nation’s Restaurant News.

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Categories: Uncategorized
  1. Van The Man
    July 14, 2010 at 11:52 am

    There are 2 issues here…

    One, in the really big picture, this has been nothing but an inventory sell off. EVERYONE in the pipeline needed to carry less wine, less inventory….so, those who had inventory, from consumers right up to distributors and importers, stopped buying as heavy and started selling of….in response to the fact there were less dollars circulating.

    As a result, when companies who depend on cash flow, like, almost everyone, started to see their cash flow slow up…they started cutting price to lure dollars out of everyone in the channel to get the pipeline flowing again.

    That resulted in a domino effect and initially, started showing lower prices…big picture, it’s now an all out “price change.”

    It’s a trend that will probably continue as my hunch is the inventory that is being drainied and sold off is not yet completely gone.

    Consumption has never shrunk…and it won’t. BUT, the market will change the prices for a while…this is a lengthy cycle.

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