In one swig, Total Wine gains two locations
Chain to absorb Goody Goody stores in Copperfield Village, Humble
T otal Wine & More is taking over two Houston-area Goody Goody liquor stores as the Maryland-based company continues its aggressive growth and goes head-to-head with local stalwart Spec’s.
Goody Goody spokesman Armando Gonzalez said Total Wine approached his company about the deal. He described it as “an offer that we couldn’t refuse” and said it would have been “a miserable experience for everybody” if Total Wine instead opened a location across the street.
“Total has such deep pockets. If they wanted that location, they would have found a way to start a location there,” said D. Christopher Taylor, director of the Beverage Management Program at the University of Houston’s Hilton College of Hotel and Restaurant Management.
The Goody Goody store in Houston’s Copperfield Village Shopping Center closed over the weekend and is expected to reopen as Total Wine on or around Thursday. Another Goody Goody store in Humble will close June 3, and it will reopen as Total Wine on or around June 8. They will both undergo renovations.
“Houston has very sophisticated wine, beer and spirit lovers,” Total Wine spokesman Edward Cooper said. “That works out terrifically
for us.”
Some of the employees are being transferred to other Goody Goody locations, and Total Wine hired others for its new stores. All employees were offered jobs if they wanted them.
Two Houston-area Goody Goody will remain, and the chain is looking to open others. Total Wine, after taking over the leases, will have grown to eight Houston-area stores within a year of opening its first area location.
“Total Wine has been marketing their entry to Houston very, very aggressively and effectively,” said Kenneth Katz, principal at retail brokerage and development firm Baker Katz.
Taylor said Total Wine enters new markets by competing on price. When it opened on San Felipe, Taylor said the store sold a popular Kendall-Jackson chardonnay for below cost, meaning it lost money when selling that bottle. It has used good deals on popular products to lure customers.
He said Total Wine is looking to dominate the industry nationwide. It touts 158 stores — 160 after taking over the two Goody Goody locations — across 20 states.
Spec’s was unavailable to comment.
“It’s been a pretty rough-and-tough competitive business since before Prohibition,” Taylor said. “And I think this shows that nothing’s changing very quickly on that front.”
Dallas-based Goody Goody entered the Houston area in 2013. At the time, owner Joe Jansen said it was because Spec’s entered its hometown in 2011.
Goody Goody may be parting with a couple of retail locations, but its wholesale business is booming. It outgrew its original 8,000-square-foot location in 2015 and moved into a 50,000-square-foot facility.
“We remain committed to Houston,” Gonzalez said, adding that it’s used to the competition. Goody Goody competes with Spec’s and Total Wine in northern Texas.
Katz said several factors may have affected Goody Goody’s entrance into Houston. It could have been the locations, quality of real estate or slow pace at which the company opened new locations. He said Goody Goody came in with a few stores and then stopped growing. Many retailers open multiple stores in a relatively short period to help brand awareness.
“They may choose to make Houston more of a priority at some point in the future,” Katz said, “but the fact that they’re going from four stores to two in all likelihood means they’re not very committed right now to growing a store base in Houston.”
He said Houston-area companies that sell beer, wine and liquor may feel short-term effects from Total Wine. But as the city continues to grow, there is room for a variety of competitors ranging from Spec’s and Total Wine to grocery stores.
“In general, a market the size of Houston can successfully support at least two major retailers in any given category,” he said.
Taylor added that the wholesale business is an area where Spec’s and Goody Goody can continue operating without pressure from Total Wine, which only does retail.
Overall, Taylor is less concerned about Total Wine affecting the market than if Wal-Mart begins selling liquor. Wal-Mart is suing the Texas Alcoholic Beverage Commission over rules that prohibit the company from selling liquor in the state.
If Wal-Mart wins, he said competitors could be put out of business. Or they may offer less variety, sticking with money makers and forgoing some of the more unique offerings.
“There’s a lot of people watching that litigation,” Taylor said.
Wal-Mart spokeswoman Anne Hatfield said there’s room for more competition in Texas. The company expects the trial to start this year.
“As we’ve seen in other states where we are able to compete on a fair and level playing field, we co-exist with liquor stores,” she said.