Wegmans pulls plug on wine sales through kiosks

June 3, 2011 7:03:48 AM PDT
Wegmans Food Markets Inc. has pulled out of an agreement with the state Liquor Control Board to sell wine through automated kiosks at 10 of the company's Pennsylvania stores, citing problems with the machines and too many customer complaints.

The decision announced by the agency Thursday deals a blow to the wine kiosk system, leaving 22 in operation nearly a year after the first pilot kiosks began vending bottles in Pennsylvania.

It also comes amid a growing discussion in Harrisburg over proposals to privatize the state liquor store system. No bill has been introduced, but Republican Gov. Tom Corbett, who is awaiting the results of a study on the topic, is a strong proponent of the idea.

Corbett spokesman Kevin Harley called the problems Wegmans described as "just another reason why the state should not be in the liquor stores business, or wine and spirits. It should be left up to the private sector."

In a letter to the Liquor Control Board, Wegmans official Craig Hoffman said that operational issues and malfunctions took the machines out of service too often, including during busy holiday seasons, and that sales were significantly lower than expected.

The largest factor in the decision, Hoffman said in the letter dated Tuesday, was a high volume of customer complaints. The company said the machines, which were installed in October, could be removed within a month.

Wegmans spokeswoman Valerie Fox said customers found the choices too limited and wanted more personalized service.

"The kiosks just did not fit well with our store environment," Fox said.

Liquor Control Board spokeswoman Stacey Witalec said the agency will focus its attention on adding kiosks to other sites, including 24 potential locations at Walmart stores.

"Certainly, we would have liked to see the convenience the kiosk brought to our customers continue in these locations," Witalec said.

The kiosks are part of a wider strategy by the liquor agency to modernize sales of wine and liquor in Pennsylvania, where such sales are controlled by the government.

Since the state's first pilot kiosks went online about a year ago, consumers have used them to purchase 82,505 bottles at a total cost of $875,000.

Customers who use the kiosks insert their identification, and a state worker at a remote location verifies it. The wine buyer must then use a breath machine to prove their blood-alcohol level is below 0.02.

Harley said the study on privatization will estimate the worth of the system and suggest ideas regarding how to sell the stores.