Wine merchant acquires taste for physical stores

The formerly online only retailer The Wine Cellar Group isn’t afraid of competition. The company is pursuing its brick and mortar ambitions with a new store in the backyard of Amazon.com and Costco, the nation’s largest seller of wine.



Born online in 1990, The Wine Cellar Group opened its first store in 2012 and has since grown to nine locations. Its newest store will be a Wine Cellar Outlet and is set to open later this year in the Heritage Square shopping center in the Seattle suburb of Issaquah, Costco’s hometown.



Costco is regarded as the nation’s largest seller of wines, offering a wide range of quality wines at attractive prices and even several varieties under its house brand Kirkland Signature. The Wine Cellar approach is to focus on sourcing small parcel and boutique wines but it also offers a proprietary brand called Cellar Collection they employs a good (Cellar Select), better (Cellar Premium) and best (Cellar Ultra) approach.



The newest store will occupy approximately 1,600-sq.-ft. in the 53,000-sq.-ft. Heritage Square neighborhood shopping center owned by Retail Properties of America (RPAI). The addition of Wine Cellar Outlet is part of a tenant upgrading effort, which also included the recent addition of The Corner Bakery Café. The strategically located center is in a high barrier-to-entry sub-market with high average household incomes and visibility off of I-90, according to RPAI.



"We are pleased to bring another strong first-to-market retailer to the community of Issaquah," said Stacy Short, RPAI’s Western Division VP. "The Wine Cellar Outlet is an exciting new retail category to add to the tenant mix, as we rebrand the center into a thriving shopping destination."



RPAI knows the Seattle market well. It owns more than 1.2 million sq. ft. in the area, which makes Seattle the company’s fifth largest market in a sizable portfolio that includes 192 retail properties totaling nearly 30 million sq. ft.



The Wine Cellar Outlet is part of the growing trend of pure play digital retailers who recognize the value of having a physical presence. The company’s website indicates it plans to open stores in Sacramento and Fort Lauderdale this year followed by 2017 store openings in St. Paul, Los Angeles, West Palm Beach, Boston and unidentified locations in New Jersey and Connecticut.