Big Business At Buster's
by Mary Hance
Superstar Retailer from Market Watch Magazine, 1989
Twenty-years ago when Rommy Hammond first set foot in the liquor and wine business, he knew he wanted to be big, and he wanted to have "the place" for Memphis-area wine lovers to shop.
Now he believes he has reached those goals with Buster's Liquors, which has grown to become Memphiss biggest liquor and wine store and the store with the biggest sales volume in the state of Tennessee.
In his office, centered behind his desk between the awards, tennis trophies and a framed, impressively-broken tennis racket, there is a big poster testifying that he has achieved his "big" goal:
"Yea though I walk through the valley of the shadow of death. I shall fear no evil for I am the meanest son of a bitch in the valley."
Romulus Morgan Hammond III (Rommy) is a native Memphian, sandwiched between his father, Romulus "Buster" Hammond Jr. who got him interested in the business, and his own son Romulus Morgan Hammond IV, who at 21 is being groomed as Buster's next generation. Hammond, 48, opened his first store in 1964 in a then-new downtown Memphis office building. "I couldnt find my niche. I'd been in the army, I'd been in school. But this looked really interesting. My father had been in the grocery business and in this business with a store downtown since 1954," he says.
A businessman was looking for someone to open a liquor store in the office building and approached his father, and then him.
"I wanted to try it. From the first I really liked it. I started getting in as many wines as I could with my limited space. I only had about 500 square feet but I could see that was where the growth would be."
BIGGEST ON THE BLOCK
"I said then, if the Lord be willing and the creek dont rise, I'm gonna be the biggest dog on the block and have really good wine. And now 25 years later, I am."
In 1970, Hammond and his father closed the two downtown stores, and teamed up under his dad's name, Buster. They moved to a more centralized location inEast Memphis, ready for some serious growth.
Hammond's expansion in the floor space and volume sales has been phenomenal, with most of the growth taking place on the wine side.
This year the growth will be in the 4% range, but some years he has seen over 20% jumps as a result of expansion and additions to his store.
This year, he expects to do $6 million in volume - a far cry from the $2,000 a week he did in his tiny store downtown 25 years ago.
He is now operating out of an 8,000 square-foot store: 5,000 selling space and 3,000 storage. With that he has about 13-15% market share in theMemphis metropolitan market.
Buster's floors look like a patchwork quilt, showing the growth marks as Hammond has knocked out walls taken over more and more space in the suburban strip center, which also houses a movie theater, a Christian Science Reading Room, a sandwich shop and a dry cleaners.
WINE FOR FUN AND PROFIT
Buster's sales are an impressive 45% on the wine side and 55% on the liquor side. Wine is a strong suit, philosophically and in hard sales.
Hammond likes the challenge and the ever-changing nature of the wine business. "Every year there is a new vintage. It is always changing. Liquor is all the same. Vodka's vodka, Bourbon's bourbon. But wine stays very interesting. There are so many" he says.
To make the liquor business more interesting, Hammond prides himself on his variety of inventory. Busters carries 65 Scotches, 40 vodkas, 20 Tequilas, 30 blended whiskies, 20 rums, 45 Cognacs and brandies.
"We do a lot in single malt Scotches and imported vodkas," says Hammond. "I mean we have Macallan, a 25-year-old Scotch selling for $90 a bottle and we have Dalmore at $80 a bottle. In vodka, we have Absolut, Stolichnaya, Finlandia, Polar Ice, Danzka, and Buster's weekly ads often feature half gallons at volume discounts.
"I advertise that I carry 4,200 different wines," says Hammond, who buys from seven wholesaler, and feels that wine is the future of the wine industry.
"If you don't have a good wine selection, you're not going to make it. There's so much more profit in it than whiskey. Whiskey has become so competitive."
When asked how he gets along with the competition, Hammond laughs. "They don't like me."
He recalls a visit from a competitor who wanted to tell him he means no ill will by opening a store in the vicinity of Buster's. "I told him I didnt care what he did. I told him I had a place in Destin, a place in Arkansas and a place in East Memphis. I told him, even my children drive Mercedes. I told him I already knew how to make money, and I didn't care what he did."
Despite his cockiness, or maybe because of it, Hammond's big volume, low price and deep selection concept has made waves in the Memphis market. Nowadays his competitors are paying more attention to wine, advertising and service.
Hammond, who now runs a twice-weekly ad featuring specials on certain products, was the first store in Memphis to advertise prices when laws were changed to allow that type of advertising.
"We've all got the same stuff. Service is very important," he says, noting that he has three full-time people on his 25-person staff who are considered wine experts.
"There is always somebody here to help with wine. In all, I'd say I've got a dozen people who really know wine," says Hammond, who believes 75% of his customers are women. Buster's draws from a 250-mile radius: west Tennessee,Arkansas and northern Mississippi. Located less than a mile from Memphis StateUniversity, it also capitalizes on the college market.
"Memphis State is a small part, but it is part of what we do," says Hammond, who says he has built a quite far reaching reputation as a wine merchant.
"We even ship wine to New York, we just have so much to choose from," says Hammond, who adds that Memphis shows signs of good strong growth in the wine market. "It's becoming much more sophisticated. Memphis has a lot of money, and there are a lot of people who travel and come back home and want good wine. The more they become interested, the more they will broaden their tastebuds."
A special feature in the store is what he calls the Howard Hughes Memorial Selection which has things like a $2,500 bottle of Scotch and $2,000 bottle of Remy Martin Cognac.
These are mostly things only Howard Hughes could afford," he says, showing off the contents of the well-secured showcase. One of the reasons Hammond sees so much possibility for growth is that per capita consumption of wine is not showing declines like liquor is. And, when compared to consumption in the wine-oriented European countries, the potential seems even greater.
"It is a challenge," he says.
Despite his ambitious and aggressive posture in the business, Hammond likes to keep things simple. The operation is not computerized for checkout of inventory control.
"I'm like Smith Barney. I like doing it the old way," he says. "It's really a very simple operation. I think the scanners are not as fast as our checkout girls."
In addition to his son, who goes by the name Morgan rather than Romulus, two of Hammond's other children, 19-year-old twins Joshua and Anastasia, also work in the store.
The fact that Tennessee has a law prohibiting multiple liquor store ownership doesn't damper Hammond's plans to add another store a little further out toward the pockets of growth in Shelby County.
"We are looking at another store in East Memphis. My son is 21 and very interested in the business, so there is no problem. Buster's East is probably what we'll call it. I don't know when, maybe even by the end of the year."
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