Liquor Stores, Off-Licences, Wine Shops Industry Terminology

ABC Laws (Alcoholic Beverage Control)

Jurisdiction-specific rules governing the manufacture, distribution, marketing, and retail sale of alcohol, including licensing, hours, age checks, pricing, promotions, and tied-house restrictions.

-Check state ABC laws before running a coupon on spirits -Our off-premise license limits Sunday sales -The ABC investigator reviewed our ID policy

ABV (Alcohol by Volume)

The percentage of ethanol in a beverage by volume; primary measure of alcoholic strength and basis for labeling, taxation, and responsible retailing.

-This Pinot is 13.5% ABV -NA beer must be ≤0.5% ABV in the U.S. -Higher ABV spirits carry higher excise in some markets

Allocation (Allocated Product)

Limited-availability products (often premium/rare) distributed in controlled quantities by suppliers or distributors based on criteria like sales history or brand support.

-We received a 6-bottle allocation of the single-barrel bourbon -Allocations are tied to our depletions -We maintain a waitlist for allocated wines

Appellation

A legally defined geographical indication for wine (and sometimes spirits) that sets rules on origin, varieties, and production (e.g., AOC, DOCG, AVA).

-Label must show the Chianti DOCG appellation -Burgundy appellation rules restrict grapes to Pinot Noir/Chardonnay -AVA noted as Russian River Valley

Basket Size

Average spend per transaction at the register; core retail KPI for merchandising, pricing, and cross-sell strategies.

-Our basket size rose after we added mixers near spirits -Holiday gift packs increased basket size -Loyalty promotions lifted basket size by $3

Blue Laws

Local or state restrictions on alcohol sales by day or time (e.g., Sunday bans, holiday limits).

-Blue laws prohibit spirits sales before noon on Sundays -Adjust staffing for Blue Law hours -We scheduled promos around holiday restrictions

Case Equivalent (9L CE)

A standardized volume unit equal to 9 liters (e.g., 12x750ml) used for reporting shipments, depletions, and velocity.

-We sold 50 CE of tequila this month -The program goal is +10 CE per store -Distributor targets are set in CE

Category Management

A data-driven process to manage product categories as strategic business units, optimizing assortment, shelf layout, pricing, and promotions.

-We used category management to rebalance rum vs. tequila space -The planogram is based on category roles -Category review set new price ladders

Challenge 25

UK retail policy to request ID from anyone who appears under 25, reducing underage sales risk.

-Train all staff on Challenge 25 signage and scripts -Mystery shop checks Challenge 25 compliance -ID scan supports Challenge 25

COLA (Certificate of Label Approval)

U.S. TTB authorization that approves labels for wine and spirits before sale; ensures compliance with mandatory statements and claims.

-The new gin label needs a COLA -We cannot receive that import until COLA clears -Label change triggers a new COLA submission

Control State

A U.S. state where a government agency controls wholesale and/or retail of alcohol (often spirits), affecting pricing, listings, and distribution.

-In control states, spirits pricing is uniform -Listings go through the Liquor Control Board -Promos differ from open states

Cost of Goods Sold (COGS)

Direct cost of inventory sold (purchase price + inbound freight/fees), used to calculate gross margin and profitability.

-COGS increased with freight surcharges -Margin = (Retail − COGS) / Retail -We track COGS by SKU and size

Depletion Allowance

A temporary per-case incentive from suppliers to distributors/retailers tied to depletions, used to fund price cuts or displays.

-$6 per case DA funds the endcap -We claimed the DA after 100 CE -DA offsets promo margin pressure

Depletions

Industry metric for product leaving distributor warehouses to retail/on-premise; a proxy for market demand downstream from shipments.

-Depletions up 8% in Q3 -Brand bonuses tied to depletions -Allocations based on last year’s depletions

Direct-to-Consumer (DTC)

Sales shipped directly from producer to consumers, common in wine (varies by jurisdiction); complements off-premise retail in omnichannel ecosystems.

-DTC is legal to 45+ states for certain wines -Tasting room drives DTC club signups -Retailers monitor DTC competition

Distributor (Wholesaler)

The middle tier (in three-tier markets) that purchases from suppliers and sells to retailers, handling logistics, sales, and compliance.

-We added a second distributor for craft spirits -Distributor cut our LTO -Delivery window is set by the wholesaler

Endcap

High-visibility display at the end of an aisle used for promotions, new items, and seasonal features.

-Holiday whisky endcap drove a 3x lift -Endcap guidelines require 3 facings -We rotate endcaps every 4 weeks

Excise Tax

Specific tax levied on alcohol, often per volume or ABV; varies by product and jurisdiction and impacts shelf pricing.

-Excise increases raised vodka retails -Higher-ABV tiers face higher excise -Excise is included in control state pricing

Facings

Number of units shown forward on a shelf; more facings typically signal priority and can improve sales and availability.

-Top SKUs get 3–4 facings -We reallocated facings from rum to tequila -OOS risk falls with added facings

FIFO (First-In, First-Out)

Inventory rotation method that sells older-dated stock first to maintain freshness (critical for beer/RTDs) and reduce shrink.

-Always FIFO the cold box -Backstock organized for FIFO -Audit revealed FIFO non-compliance

Floor Stack (Case Stack)

Mass display of cases on the sales floor to feature value or seasonal items; often tied to trade funds and signage.

-60-case stack of cabernet for Thanksgiving -Stack secured with price signs and safety cones -DA supports the floor stack

GI (Geographical Indication)

Protected designation linking a product’s qualities to its geographic origin (e.g., Scotch Whisky, Tequila, Cognac, Champagne).

-Use 'Scotch' only for GI-compliant whisky from Scotland -Tequila GI requires agave from Jalisco zones -GI noted on label

Gondola

Primary aisle shelving unit in retail; planograms define shelf positions, rows, and facings on each gondola.

-Reset the vodka gondola to the new planogram -Top shelf for premium SKUs -Bottom shelves for large formats

Gross Margin

Sales minus COGS expressed in dollars or percent; core profitability metric guiding pricing, mix, and trade spend.

-Gross margin target is 29% -Mix shift to premium raised margin -LTOs compress gross margin temporarily

High-Low Pricing

Promotional strategy alternating regular prices with periodic deep discounts to drive traffic and stock-up.

-High-low cadence every 8 weeks -Mix high-low with EDLP on mixers -Shoppers respond to high-low on whiskey

ID Scanning

Electronic verification of government IDs to confirm age and detect fakes; often integrated with POS and store policy (e.g., Challenge 25).

-2D barcode scanners verify age instantly -POS prompts for ID on alcohol -Audit tracks ID overrides

Inventory Turnover

Rate at which inventory sells through over a period (COGS ÷ average inventory); balance turns vs. service level.

-Target turns of 10 for beer -Turns slowed after overbuying rosé -Higher turns free up cash

KPI (Key Performance Indicator)

Quantifiable measures of performance toward business goals (e.g., sales, margin, OOS, basket size, loyalty signups).

-Weekly KPIs include OOS rate and margin -We dashboard facings compliance as a KPI -RTD velocity is a key KPI

Limited Allocation

Restricted quantities of sought-after products assigned to accounts, typically based on performance, support, and compliance.

-Allocation earned via portfolio support -We prioritize top customers for limited allocations -Allocation drops in Q4

Limited Time Offer (LTO)

Short-term promotional price, pack, or gift item supported by trade funds and signage; subject to local legal limits.

-$5 off LTO on tequila for Cinco de Mayo -Holiday LTO gift pack with glassware -Ad follows LTO legal copy

Liquor Control Board

Government body overseeing alcohol control (licensing, pricing, listings) in control jurisdictions (e.g., PLCB, LCBO).

-Listing approval goes through the Control Board -Prices change on Board schedule -Board audits store compliance

Loyalty Program

Membership program capturing customer data to enable targeted offers, basket growth, and retention (subject to alcohol discount regulations).

-10% wine club discount where legal -Loyalty data informs assortment -App-based loyalty boosts repeats

MAP (Minimum Advertised Price)

Supplier policy setting the lowest advertised price (not necessarily the actual selling price) to protect brand equity, especially online.

-MAP for the single malt is $59.99 -Ads must comply with MAP -We received a MAP violation notice

Merchandising

Presentation of products in-store and online: planograms, displays, signage, adjacencies, and seasonal features to drive conversion.

-Merchandising the cold box by style -Add shelf talkers for ratings -Cross-merch mixers with spirits

No/Low Alcohol (NoLo)

Category of beverages with zero or very low alcohol (often ≤0.5% ABV) positioned for moderation occasions.

-NoLo set near soft drinks -0.0% lager is a top NoLo SKU -January NoLo promotion lifted traffic

Off-Premise

Sales for consumption away from the point of purchase (e.g., liquor stores, off-licences, grocery), as opposed to on-premise (bars/restaurants).

-Off-premise tequila growth is strong -Layout suits off-premise missions -Supplier split: off- vs. on-premise

Omnichannel

Integrated customer experience across in-store, web, app, click-and-collect, and delivery marketplaces.

-Enable curbside pickup for omnichannel shoppers -Sync planograms with online PDPs -Omnichannel promos must meet alcohol ad rules

Out-of-Stock (OOS)

When an item is unavailable on shelf or online due to supply, replenishment, or planogram issues; measured as OOS rate.

-RTD OOS spiked on hot weekends -Backroom checks reduce OOS -OOS alerts trigger substitutions online

Planogram

A diagram specifying product placement, facings, and shelf allocation to optimize visibility, flow, and sales.

-New planogram expands tequila space -Audit planogram compliance weekly -Pinot moves to eye level per plano

Point-of-Sale (POS) System

Checkout hardware/software handling transactions, age prompts, inventory, and loyalty; often integrates e-commerce and delivery.

-POS prompts ID for alcohol items -Scan data exported from POS -POS handles mix-and-match pricing

Premiumization

Consumer trend of trading up to higher-quality, higher-priced products, often with craftsmanship stories and limited editions.

-Premiumization lifted spirits margin -Feature 100% agave to support premiumization -Premium RTDs outpace FMBs

Private Label

Retailer-owned brands developed with producers; can deliver higher margins and exclusivity.

-Private-label Malbec at $9.99 -Own-brand gin fills a price gap -We negotiated quality specs for private label

Proof

Measure of alcoholic strength; in the U.S., proof = 2 × ABV (e.g., 40% ABV = 80 proof).

-Bonded whiskey is 100 proof -Proof impacts excise tiers -Lower-proof cocktails appeal to moderation

RTD (Ready-to-Drink)

Pre-mixed beverages (spirits-based, wine-based, or malt-based) sold in cans/bottles for immediate consumption.

-Spirits-based RTDs require liquor licensing -RTD variety packs drive trial -Cold box allocation favors RTDs in summer

Scan Data

UPC-level sales data recorded at POS, used to measure velocity, promo lift, and share (from retailers or syndicated sources).

-NielsenIQ scan shows +12% for tequila -We share scan data with the distributor -Scan informs our LTO calendar

Shelf Talker

Small shelf-mounted sign highlighting price, ratings, tasting notes, or awards to aid selection.

-Add shelf talkers for 90+ scores -QR shelf talker links to reviews -Shelf talkers funded by trade spend

Shrink

Inventory loss from theft, breakage, spoilage, or administrative errors; tracked as a percent of sales or inventory.

-High-shrink SKUs placed behind counter -Glass breakage drove shrink -Cycle counts help reduce shrink

SKU (Stock Keeping Unit)

Unique identifier for a distinct item (brand, variety, size); fundamental unit for assortment, inventory, and reporting.

-Add the 1.75L SKU to the set -SKU rationalization cut tail SKUs -SKU count impacts backroom space

Three-Tier System

Legal framework (common in the U.S.) separating suppliers, distributors, and retailers to control the alcohol trade and taxation.

-Suppliers can’t sell directly to retailers in most states -Brand must choose a distributor per state -Exceptions exist for DTC wine

TTB (Alcohol and Tobacco Tax and Trade Bureau)

U.S. federal agency regulating alcohol labeling, formulas, permits, excise taxes, and enforcement (e.g., COLAs).

-Submit formula to TTB for the cordial -COLA approval pending TTB review -TTB audits excise filings