The American wine retail scene is going through major changes driven by shifting tastes, economic challenges, new technology, and evolving cultural trends. This evolution is perhaps nowhere more evident than in New York City, long considered the epicenter of fine wine commerce in the United States. From the dramatic fall of storied institutions to the rise and subsequent struggles of digital innovators, the wine retail sector presents a case study of an industry in flux.
Falling wine sales and changing consumer preferences
Wine sales in the United States have experienced a notable decline in recent years. According to data from Wine and Spirits Wholesalers of America’s SipSource, wine sales dropped by nearly 8% in 2024 compared to 2023, with declines affecting both on-premise consumption at restaurants and retail purchases at wine stores. This decline is steeper than comparable decreases in beer, cider, and spirits sales, signaling particular challenges for the wine category.
This downward trend reflects a broader shift in American drinking habits, particularly among younger consumers. Industry expert Mike Veseth, publisher of The Wine Economist newsletter, observes this generational disconnect in an article on nbcnews.com: “The baby boom generation embraced wine. We imagined that the generations that followed would keep doing that, but they haven’t.”
As older wine enthusiasts age out of the market, younger consumers are not replacing them at the same rate.
Health concerns are playing a significant role in this shift. The drop in demand is noted in a 2023 Gallup poll, showing that more than 4 in 10 Americans now think alcohol is unhealthy. The U.S. Surgeon General’s recommendation for cancer warning labels on alcoholic beverages has also amplified these health concerns, driving consumers toward lower-alcohol alternatives or complete abstention.
The tale of two New York institutions: Sherry-Lehmann and Chelsea Wine Storage
New York City’s wine retail scene has been rocked by high-profile business failures, none more dramatic than the collapse of Sherry-Lehmann. Once hailed as the “queen of wine shops” in America’s biggest wine market, the store had been a landmark on Madison Avenue since its founding in 1934. It helped pioneer the sale of wine futures in the 1950s and served generations of Manhattan’s elite for generations. Silent film star Greta Garbo was once a customer. According to Market Watch as recently as 2018, Sherry-Lehmann was generating $42 million in annual sales.
However, in recent years, Sherry-Lehmann’s fortunes declined sharply under the co-ownership of Shyda Gilmer and Kris Green. The store’s troubles came to a head in 2023 when the New York State Liquor Authority suspended its license over $2.8 million in unpaid sales taxes. Customers have since sued, claiming they paid millions for wines that were never delivered. Others say valuable collections they kept in the store’s off-site Wine Caves storage facility went missing.
The company had already been on shaky ground for years. Its 2007 decision to sell its Madison Avenue building and relocate to a rented Park Avenue space saddled it with nearly $2 million a year in rent, a burden that became unsustainable after corporate clients disappeared during the pandemic and never fully returned to Midtown. When the dust settled, Gilmer and Green had abandoned the business, leaving behind more than $3 million in unpaid rent and an even bigger mystery: What happened to all that missing wine?
“Sherry-Lehmann was once the Tiffany of wine retail—an institution,” says Hernando Courtright, former wine and spirits specialist at the store. “But after the founding Aaron family sold the business to the new partners, a slow but steady decline set in. They were not up to the task, and the end came fast. It was sad. It was a crime. We all await justice to be served.”
Chelsea Wine Storage, another once-trusted name in the industry, drew headlines of its own when customers discovered their collections had been moved without notice. The company came under investigation by the New York State Liquor Authority after reports surfaced of missing inventory, some of which involved rare Burgundies worth thousands of dollars per bottle.
Its troubles deepened after it relocated from Manhattan’s Meatpacking District to an unfinished basement beneath a shuttered T.G.I. Fridays in Times Square. Customers reported being unable to get responses to emails or calls, and some said prized bottles had vanished from their inventory records. Concerns about wines being mishandled, stored improperly, or even illicitly sold only added to the anxiety.
These high-profile failures have eroded trust in traditional wine retail and storage models, especially at the luxury end of the market. They also reflect broader financial pressures facing brick-and-mortar businesses in high-rent cities, where overhead costs can quickly become unsustainable.
The challenges facing New York City’s wine retail landscape became even more apparent with the recent departure of another longtime institution. Morrell Wine Group, a New York mainstay since 1947 that had operated from various Manhattan locations, including a flagship store and wine bar at Rockefeller Center, quietly relocated its entire operation to Briarcliff Manor in Westchester County. The move marked the end of an era for a company that had been instrumental in shaping the city’s wine culture, pioneering the first public fine wine auctions in 1994.
One wine sales rep stated off the record that Brooklyn and certain parts of Queens, particularly those closer to the city, were experiencing difficulties. “From what I’ve seen, after the pandemic, a lot of the people in Brooklyn moved to the Hudson Valley and upstate, and younger people, 25 and 30-year-olds who have taken their places are not drinking wine to the same extent.”
The rep painted a bleak picture of the area’s retail landscape. “In a six-block radius where there were 3 or 4 wine shops, some of these stores are really struggling. Some have closed, some are down up to 40% over the last two years, and others are trying to sell. I have customers who I have worked with for a long time who are now bouncing checks. It is a real problem.” He noted that his clients in northern New Jersey were not suffering the same struggles. “New Jersey wine stores are doing fine, some are up 5%, others flat. There is a limit to the number of retail stores allowed in New Jersey, and this has really helped them. This is really a New York City problem.”
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