tv Washington Business Report ABC June 24, 2012 9:30am-10:00am EDT
captioned by the national captioning institute --www.ncicap.org-- >> business news from the capital region. this is "washington business report" with abc7 national correspondent rebecca cooper. >> thanks r joining us for a look at business and financece here in the washington region. let'ss do it the twist. ben bernanke comtting billions of dollars to operation twist. moody's took a whack at the credit rating of 15 major banks which could make it more expensive for you to rrow money. and turning sour over the worry about spain.
in d.c., council members decided who would take over key positions followining the downfall of kwame brown. we wilill have those topics and more for a roundtable. first, we will focus o on the company that has become the ast of the beverage industry. arealking about total wine & more th largest independent retatailer of a fine wine. david and robe tro opened two win retailers and then opened several ofheir own. we are glad to have with u david and robert tronene. welcome to "washington business report." david, t oldldest, robert is the youngest. whose idea was it? >> a joint idea of. >> at what age?
>> we stard in 1991 as a beer business in pennsylvania. then we got into wine a spirits. we were probably 28, 30 years old? >> you bototh were atat penenn. what led you to see this as a business opptunity? >> actually, no drinking in college. we were th looking for a new opopportunity. we knewhat there was not as much cpetition. we chose the delaware market to open ourur first two store in 1991 dame day >> whahat di you that entrepreneurial spirit? >> carly our father was an entrepreneur. we both grew up on a farm in centrapennsylvania. he was involved in all kinds of
stuff. >> fast f forward 22 years. robert, you have two stores in delaware. now you are in 13 states main building >> . >> we both never had a plan to grow the business thisbig. we are able to grow the business and would like to continue to do so. >> how many stores do you anticipate opening? >> this year, we will do 10. next year, 10 or 11. we are pushing into new mexico. what made you decide to go into let's give this a try to we nt to get big? >> in delaware, you are only allowed to own it two stores in one family. in maryland, only two stores in
one family. that leds to va.a. >> you are just goi to have too keepep m moving. tell me about the company based in maryland. >> the washington metro is a perfect central location with th airports and grade schools and great culture, etc. we decided to focus right here and branch out from ththere. >> talk about the business model because it is basased on helping the consumers. talk to us about how your employees are traineded. >> we have an extensive three- week trainingg program that we go through d tell them about how to dcribe win each of the regions, and how to interact with the customers. >> we say if the rest of the country likes american cheheese,
the washingn r region likes camembert. is there an educated wine consumer in this area? >> it is much more cosmopolitan and international. if it is french winine, it is clearly goining to be in the washington metro versus more california-cecentric. h do you survive through the recession? you all continue to grow when many retailers -- >>uring the recession given our r business model of offering low prices, we grew our b business as people moved out of the permarkets.. we offefered a greatt value. aftethe recession come e that they stayed with us. >> i saw in one ofof the interviews people were coming mumuch more frequtly than they were they trying to drink their way out of the recession? >> there was definitely some
drinking their way o out of the ression. it was a shift from a white tablecloth restaurants w which did not work with the newew economic realitieo home enttaining. >> what ishe plan now? how did you see the economy growing custotomer how are you making your decisions based on the economiforecast? >> i think the business models strongng ande are continuing to expand. >> tk to me about thehe beer business. you have a large beer selection. you ar seeing more craft beers. beeras grown about 26% in theast three years. it is just exploding. we are driving tremendous beer selection. we are testing a new ccept a ore within a storere focused
craft beers. >> anylans in our region? >> i if it works in washington, wee wiwill bring it back to washingtoton, d.c. >> state-owned alcohol stores -- there has been a lot of talk about that here in the region. let's take a quick break. stay with us.. ♪ ♪ [ male announcer ] from our nation's networks... ♪ ♪ ...to our city streets... ♪ ♪ ...to skies around the world... ♪ ♪ ...northrop grumman's security solutions are invisibly at work, protecting people's lives... [ soldier ] move out! [ male announcer ] ...without their even knowing it. that's the value of performance. northrop grumman.
i want to talk to you more about the whole issueue of privatization becacause it is an iss that virgrginia has been grappling wi. you say th is very similar to what you sawappening transitioning in the state of washinggton where they are transitioning to privatization. we are worried aboutut what it would mean for ste revenue and what it would meafor consumerer prices day. >> washington state is ght on point for what probably shoululd happen and eventuall will ppen in virginia. washington passed a referendum that was approved by the cizens effective june 1. they have been private for spirits. we opened the june 28 in seseattle. the state did not have to put on extra taxes to cocome ourevenue- neutral and that was important. our pricing going in -- we
compare that to w what the old ste pricing was. we are up $5 a bottle last. how do you do that? what's the state was just grossly inefficient. -- >> the state was just gross inefficient. >> what t is the difference between the state of washingto >> almosost identicalal to virginia. virginia stores a are very small. we will get bebetter selection better serce and better prices to consumers. whwhat things have e you learned along the w that you wish you uld have kwn bk then? what are the secrets of success? >> the importance of building our own team and investing in our people pay bibig >> h do u find good people -- in our people.
>> how do you find good peopl > we like people with a a lot of drive and energy. >> evenen more so than thehe knowledg of the wine business? >> we e cannot teach them that ive. >> anything abo marketing that you learned? >> we understood early on at that price was going to be the key focus to get inside the door. we now understand the service coefficient and that is when the people come in to have the best trained team to give the customer the best line at ththe best price paiainting >> which state are you in with thee stomer likes to spend more on average for wine? >> i ththink in the state of flida, they spspend very mucuch on wine especially in the miami
and weelcome patrick reis from politico. welcome, gentlememen, and thank you for r joining uss. all eyes have been on europe and you have been covering some ofof e mess going on thehere. we thought this week that the pro-bailouincrease wld mean that the market would remain steady. a short bounce on n monday and then people started worrying. how much concern is s in waingt about tll the different problems that are facing europe right now? >> for businesses, it is a difficult time trying to fifigure outt what invnvestment decisions they shoul makake. ifif the eopean crisis believed er to t u.s., the president is facing a touough economy. they are trying to figure out if there is anythinghey can say or do to improve the sittion or m make it clear to voters that
this is not their mess. you have been covering operationn twist. that is basically the fed selling short-term assets in order to buy out longer-term government debt, the idea ing it could help alleviate some of the rates on momortgage rates but pepeople questn whether t that will have an impact. has operation twistst worked so far? why did thehey decide too extend it? >> when the jobs report came in, th were dismal. they produced a widespread panic about whwhat is going on in the economy. if you can extend this program perhaps you can produduce an tick. it i is nearly imimpossible to know how well i it is going to work in the future. >> for all of t fed goverrs
who v voted ben bernanke our governor richmond said he i is worried it will lead to inationary pressure and thatat cocould be a bigg problem than the lack of stimulus. >> that has not have been the. wiwith allll othes diffent efforts to pump in money, if it were to come in at oe, t concern is it would send inflatio t throughgh the roof. >> there are people saying we need something much bigger than operationn twist. how you rate the chanceces of something muchigger thahan this being undertaken by the fed o or the white house? >> the idea of fiscal stimulus mong thrhrough coness is simplyot going to happen. would not p pass the senate or the house.e. >> if anything, we are gog to see the opposite when we see
thos automomatic cuts go through. they are g goingo have to offsett those. >> as yo said, if anything we will see a weaver stimulus. it does seem likely they will reach aa deal at t the end of the year ending in t meantime, businesses are watching to see if these tax cuts expxpire. it is hard to cvince them to make investments or r hire people. which could be a year-long economomic doldrums. members of ngress have been questioning how much financialal say we should have over the city if we cannot keep ourur councilmembers out of jail or having to resn. we have not talked to you since kwamae brown stepped won.
>> it is chaos but ty have brought in the at-large council member f for a s special election in novembe there is no investigation. he is clear a save. i think people in terms of gegetting the council in o order, , i think people feel cfident he is the guy to do it. of course, kwame brown's exit means we have a lot of shifting onon the council. i think iwill take some time to reorganize and make sure everything is inin place to co as you said cannot get the council's house e in oer. it i is cha. >> thahat is what i i want to get too in a momoment. i nt to talk about wt this ans for the mayor. the business comnity was divided in the mayoral election.
there were some who stronglgly supported vincent gray. the ard of trade supported fey. once t the mayor was elected i was surpriseded how fast the business community coalesced around him. no one is probably y more disappointed than ththe suggles e has had. are the problems because it just looks bad in a lump sum with all the other investigations? >> the support that he h had from the chamber, he still has that. the board of tradede is t the regional organanization. the chamber is abc-centric business orgrganization. dc is still running pretty well. if you can getet past the fact that so many elected leadeders seem t to be under investigation the moneys still coming in, the tax revenue e still l coming
in, service is being run well. >> still a city wi a big perception problemem. let's talk aut michael brown. he is going to be chairing the economic committee. you wrote a big article. "w"what can michael b brown do for business?" marion barry said he was opposed to michael brown stepping into the e positition. what can he do for business? >> he can continue to move the major projects through t the pipeline. they? the projects like soututhwest waterfnt or the macmillan redevelopment. he moves those throuough the pipeline. >> do you think h he was aood selectionn for theob? >> i think he was one ofhe only ones. ththe busisiness commumunity is skeptical of m because of his role in the d.c. hiring laws that they are concerned with.
but they seem to believe thae understandss business and transactctions in f. >> we are about too run out of time. what happepened in that led too county? -- in loudoucounty? >> very much like faiairfax county. they are not criticizing the way that it runs but i think they believe ththat in independent organization would be much m more effective inarketing the county and gettingommercrcial development grgrowing. the coununty is s still very muc stuck in the 1990 prado than fairfax. >> thank you for joining us this week. up next, the number of the week.
developing smaller portion sizes and more low- & no-calorie beverages... adding clear calorie labels so you know exactly what you're choosing... and in schools, repeplacing full-calorie soft drinks with lower-calorie options. with more choices and fewer calories, america's beverage companies are delivering. ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪
>> welcome b back. 270,000 is the number of new health care jobs our region is expected to add between now and the year 2020 a steady from georgetownn univiversity found virginia, maryland, and the district are expecting 20% h health care growth. growthegardless ofof what the supreme court decides abobout obamacare. that will be our topic next week. thank you fofor joining usus.