Occasionally I visit Warehouse Wines & Spirits in New York City. No, I am not a paid booster for this store. But clearly, it has become a must for aficionados searching for premium single malts at discount prices. (Note – there are other good single malt shops in the city such as Park Avenue Liquors and Skyview Wine and Spirits). Besides indulging in the eternal quest for the perfect single malt, I view my pilgrimages as windows into what is happening in the economy. Single malt is a pursuit of the upper middle class (or those aspiring to be) and a relatively small luxury item, compared to cars, furs, mansions and private jets.
Observations from the Warehouse Battlefield
First, gone is the variety of single malts available for sale. For example, Warehouse used to carry four or more expressions of Laphroaig; now it carries two. The same reduction has occurred in its Talisker line. Second, on the remaining lines, significant discounts have largely disappeared. On some items prices have been increased from $5 to $10 per bottle. Third, the most promoted single malt has been Lagavulin 16-year-old. As I have mentioned in previous blogs, this particular bottling reached a low price of $47.99. It has since experienced two price increases to the current $54.99. This is still quite a bargain compared to prices across the river in New Jersey where it sells for as much as $95 per bottle.
Why Is This Important?
While it appears trite or silly to discuss single malt scotch, it is a good indicator of what is happening in the upscale import market. Single malt is priced in Euros (I was surprised as I thought it would be in British pounds). The price increases in this market reflect price increases in imports generally. It also demonstrates that at least in the upscale New York City beverage market, demand has picked up somewhat and importers and retailers have some pricing power. Even at this discounter, prices have increased 10-20%. The era of single malt deflation is at an end, as my Single Malts I Like Ever (“SMILE”) has risen. See Update on Deflation
One has to wonder how much prices have risen for more other necessary, important and basic commodities. Further, it is interesting that our choices are beginning to contract. My guess is that down the road Americans, who heavily rely on imports, will be “treated” to further diminishing choices, and higher prices on less desirable merchandise.
Thank you, Dr. Bernanke and Mr. Geithner, for trashing the dollar. I will not be drinking to you.
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