Hoboken, New Jersey, measures just a little over one square mile in size. Yet the city located across the Hudson River from Manhattan boasts 28 stores with licenses to sell beverage alcohol, not to mention hundreds of bars and restaurants. Sparrow Wine & Liquor Co. was one of Hoboken’s first businesses to receive a liquor license after the repeal of Prohibition. More than 80 years later, it’s still going strong, providing a vast selection of wine, spirits and beer to its clients, along with competitive prices and a commitment to customer service.
Just a 10-minute train or ferry ride from New York, Hoboken—famed as the birthplace of Frank Sinatra—appeals to young professionals with its easy commute, bars, restaurants and gorgeous city views. According to the U.S. Census Bureau, Hoboken’s population soared 30 percent between 2000 and 2010 to more than 50,000 residents, making it one of the most densely populated cities in the country’s most densely populated state. Many of those residents, as well as occupants from neighboring cities, are among the loyal customer base of the two-unit Sparrow Wine, which is the largest beverage alcohol retailer in Hoboken, according to owner Armando Luis. “We have 26 competitors within a square-mile radius, and many of our customers will walk past two or three shops to get to us,” Luis says.
The company was founded as a tobacco retailer in 1922. When Prohibition ended, beverage alcohol sales were added, and Sparrow soon emerged as one of the area’s leading liquor stores. In 1977, Luis’s parents, Placido and Rocelia, purchased the business, located on Washington Street, and he assisted them in running it. Once Luis took over in 1986, he began placing a greater emphasis on fine wine. In 1999, he added a second, larger store on Hoboken’s newly renovated northern waterfront at the site of the old Bethlehem Shipyards, which today serves as the flagship unit. Though Hurricane Sandy left much of Hoboken flooded in 2012, Sparrow’s two locations were remarkably untouched by the floodwaters.
The business has continued to thrive. Luis—who also owns the two-unit La Isla restaurant—estimates combined sales revenue for Sparrow’s two stores at approximately $10 million, with the Shipyard Lane location accounting for at least 60 percent of the volume. “We’re very proud of the fact that we’re seeing growth in this very saturated market,” he says. Sparrow employs about 30 workers at the two stores.
The flagship store is approximately 6,000 square feet and caters to an affluent clientele—customers who typically purchase a case of wine, rather than a single bottle, Luis says. The original store—just 10 blocks away—is a little over 3,000 square feet and tends to attract young professionals in search of a convenient transaction. “People will walk by and grab a bottle for home or a ‘bring-your-own’ restaurant,” he explains. “That store is more for impulse buys while the flagship is a destination, high-end store.”
Luis is a stickler when it comes to attractive store merchandising, shunning multi-case displays and supplier p-o-s for simple price stickers and occasional wine reviews. “All of our p-o-s is created in house,” he notes, including reprints of wine scores and reviews that are inserted into plastic casing and clipped on wooden wine boxes. Much of the wine sold at Sparrow is attractively merchandised in custom-made maple boxes that are placed flat on the floor or tilted on wine racks. Staff is encouraged to “front the shelves,” ensuring that all bottles are neatly aligned at the edge of every shelf.
Diverse Wine Offerings
Wine accounts for about 54 percent of the company’s total sales, with spirits at roughly 23 percent, beer at 20 percent and miscellaneous items like wine accessories and glassware comprising the remainder. Sparrow carries around 2,300 wine labels, priced from $5.99 for a 750-ml. of Sutter Home to $465.99 for the 2003 Vega Sicilia Único. The average retail price for a bottle of wine at the Washington Street location is $15, while at the Shipyard Lane store it’s $18. Top-selling wines include the 2015 Whispering Angel rosé ($19.99), 2015 Scarbolo Pinot Grigio ($14.99) and 2015 The Prisoner red blend ($50).
Offerings from California comprise about half of Sparrow’s wine sales, says wine director and general manager Javier Martinez. “There’s a lot of loitering in the California wine aisle,” he notes. Sparrow also takes pride in its selection of wines from Spain and South America, particularly Argentina and Chile. In fact, the company has marketed its own private-label wine, Havana Rose, for several years. The wine has been made in Argentina in the past, but this year production will move to Spain under the guidance of importer Jorge Ordoñez. The line of five varietals retails for under $10 a bottle. In general, rosé is one of the hottest trending categories in the stores, according to Martinez. “Rosé is hot year-round,” he says, noting that demand starts building as early as March.
The stores stock between 800 and 900 spirits SKUs, priced from $8.99 for a 750-ml. of Georgi vodka to $1,699 for The Macallan 25-year-old single malt Scotch. Vodka is the top-selling spirits category at Sparrow, led by Tito’s ($19.99 a 750-ml.). Similar to other retail stores, sales of American whiskies, including Bourbon, are surging, and Sparrow is seeing more labels becoming allocated. Luis estimates the stores stock up to 150 different American whiskies, with top-sellers including Basil Hayden’s ($39.99), Eagle Rare ($39.99) and Maker’s Mark ($38.99 a liter). Imported whisk(e)y is also selling well, says Martinez. He notes that Jameson Irish whiskey ($39.99) is popular with millennial customers for use in Green Tea shooters.
Sparrow stocks more than 1,000 beer SKUs, priced from $5.99 a six-pack of 16-ounce cans of Narragansett lager to $34.99 a 750-ml. of the 2016 Bruery Poterie Anniversary ale. Top-selling labels include Bud Light ($6.99 a six-pack of 12-ounce bottles) and Modelo Especial ($14.99 a 12-pack of 12-ounce cans), but the stores focus on craft brews, which have an average price of $10.99 a six-pack. “People are broadening their palates,” says beer director Laz Luis, who is Armando’s nephew. “While IPAs are still selling like crazy, people are also starting to understand wild ales, farmhouse ales and sour beers.” The Shipyard store features more than 20 cooler doors devoted to beer. Popular crafts at the company include labels from Sixpoint, Dogfish Head and Neshaminy Creek.
While many beverage alcohol retailers struggle to make online sales profitable, Sparrow has found success in that sector. Armando Luis estimates the company’s annual online sales at $1 million, with an average order of $145, compared to typical in-store rings of $31 to $38. Sparrow offers in-store pick-up or delivery to Hoboken and surrounding towns. The retailer sees more opportunity with internet sales and plans to launch its website upgrade in the fall to continue driving business.
The website overhaul will coincide with improved social media integration. While active on sites like Facebook, Twitter and Untappd, Sparrow will soon “put a lot more effort into social media,” Luis says. Beyond digital, the company sees great value in local advertising. “We allocate 2.5 percent of our projected sales to advertising,” Luis explains. The strategy includes spots on cable television and signage on local transportation systems like the New York Waterway ferry and Port Authority Trans-Hudson Corp. (PATH) trains. Around 7,500 customers receive weekly email newsletters as well.
Marketing support also includes frequent in-store wine, beer and spirits tastings. “Almost every week we have something going on in the stores,” notes Martinez, pointing to complimentary samplings conducted by either store staff or brand representatives. Recent samplings included El Buho mezcal, Zuccardi Q Malbec and Smuttynose Finestkind IPA. Sparrow also hosts tasting fundraisers off-site for local schools and hospitals, attracting between 200 and 1,000 guests. “Over the last 20 years, I’d bet we’ve raised several hundred thousand dollars,” Luis says. “I’m very proud of our community involvement and our employee commitment and longevity. We’ve become an iconic presence in Hoboken.” Indeed, Luis sees opportunity in the city’s “expatriate community”—former residents now living around the country—and in the next year Sparrow will expand into national online sales.
As the business looks toward its 100th anniversary in 2022, Luis acknowledges that his stores will continue to face tough competition. “I think it’s inevitable that the industry in New Jersey is going to become more liberal,” he says, pointing to efforts to open up wine sales in supermarkets. “When it does happen, the things that made us strong in the past will continue to make us strong.”