Wegmans pulls out of Pa. wine-kiosk program

Posted: June 03, 2011

HARRISBURG - You won't be seeing those wine kiosks at Wegmans anymore.

Wegmans Food Markets is pulling out of the state's much-criticized wine-kiosk program, dealing a blow to the state Liquor Control Board's efforts to shed its image as a lumbering government bureaucracy and stave off privatization.

In a statement late Thursday, the supermarket chain said: "We had hoped that our customers would find the kiosks to be a valuable addition to their shopping experience, but that proved not to be the case."

The Rochester, N.Y., chain said that if anything, the state's latest attempt at user-friendly wine sales had backfired. A letter from Wegmans to the LCB complained that the machines often malfunctioned, leading to a "significant volume" of customer complaints.

"The kiosks have not realized their potential, and in some ways have been detrimental to our stores," the letter stated.

Wegmans markets house 10 of the liquor board's 32 kiosks statewide; those 10 include stores in Warrington, Downingtown, and Easton. The chain's decision to pull out of the program wipes out almost 32 percent of the agency's operating machines.

Stacey Witalec, spokeswoman for the LCB, said the board was disappointed by Wegmans' action - but she stressed that the kiosk program would continue. She said the agency was in talks with Wal-Mart to put the wine machines in 24 of its stores.

Witalec also said she did not believe Wegmans' decision amounted to a condemnation of the kiosk idea as a whole, adding that the board was focused on making its remaining 22 kiosks successful.

The LCB's plan, however, to stock some of the kiosks with hard liquor as well as wine has been temporarily stalled because some legislators voiced concerns.

"Our focus is the customer," Witalec said. "We want to make sure we are doing things that people will embrace."

Still, the Wegmans news could hardly have come at a worse time for the LCB.

Gov. Corbett has made no secret of his desire to privatize the state's wine and liquor stores. Recent polls show a majority of Pennsylvanians agree with him. His office is working with House Majority Leader Mike Turzai (R., Allegheny) on a proposal. There is no bill yet, but Turzai has said he expects to see legislation by summer.

In the meantime, the LCB hasn't sat idly by.

Over the last few years, the liquor board has launched an aggressive strategy to operate more like a private business. It has spent hundreds of thousands of dollars to spiff up its stores, boost its wine selection, and train its employees to be more customer-friendly. It has also opened upscale stores to cater to a more discriminating crowd.

Then came the kiosks.

The program was launched last summer as a way to make it easier for consumers to do one-stop shopping: pick up a bottle of wine while at the grocery store.

It took time for shoppers to warm to the idea of buying wine - for some, a highly deliberative endeavor - from what amounts to an elaborate, 10-foot-high vending machine. And an intrusive one at that. The kiosk scans driver's licenses and requires customers to blow into a Breathalyzer.

There were also mechanical glitches. The LCB had to shut the kiosks down late last year, smack in the middle of the Christmas holiday booze rush. Some of the machines, apparently, were taking money without dispensing bottles.

The shutdown was embarrassing, and became more so when state Auditor General Jack Wagner launched an audit of how the kiosks were working and how much money they were making for the state. The audit is not yet complete.

Although the liquor board got the kiosks running again, consumer confidence lagged, as did sales in some spots, the agency has acknowledged. Since the first machines went into operation, customers have bought 82,505 bottles for a total of $875,000.

Some kiosks have fared better than others. Sales at some Wegmans stores, for instance, have been paltry compared with those in others, according to a printout of sales at all stores provided by the liquor board.

Witalec said Thursday that Wegmans had notified the agency earlier this week of its intention to pull out of the program. The supermarket chain gave a 30-day notice but offered to be flexible about the date.

It is not yet clear whether the kiosks will be moved to other stores.


Contact staff writer Angela Couloumbis at 717-787-5934 or acouloumbis@phillynews.com.

Tracie Mauriello of the Pittsburgh Post-Gazette contributed to this article.

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