Regional liquor sales yield mixed profits

Talk about it

More...

• Analysis of Municipal Liquor Store Operations

WORTHINGTON — Several area liquor stores suffered net losses in 2007, according to an Analysis of Municipal Liquor Store Operations released Tuesday by the Office of the State Auditor.

But others — including Jackson, Lakefield, Luverne, Pipestone, Worthington, Windom and Wilmont — reported net profits for their city-owned liquor stores.

In fact, Worthington was ranked 40th in gross sales on a list of the 214 Minnesota cities with municipal liquor stores, netting a profit of $241,949 in 2007.

That money goes to finance store operations and into the city’s general fund, said Worthington City Administrator Craig Clark, adding the money was not targeted toward any specific purpose.

Sean Johnson, manager of Worthington Municipal Liquor Store, said business is up this year, too, even as the economy slumps. He attributed the 2007 profit to Worthington’s extra “residents” that year, workers on projects such as the ethanol plant and windmills. Some project laborers remain today.

In the past, he was also able to take advantage of retailers’ bulk discounts by combining the Worthington store’s purchases with those of Marshall Municipal Liquor. Not anymore, though.

“All the companies have lowered their (prices) to where I can buy it myself now,” he explained.

Worthington falls in line with national trends. Liquor sales are up as much as 10 percent across the country, and net profits for off-sale operations in Minnesota were up 15 percent over 2006.

Even so, some stores in Greater Minnesota continue to struggle. All 31 stores reporting net losses were located outside of the seven-county metropolitan area. According to the report, the 20 stores located “within the Twin Cities Metropolitan Area are considerably larger and more profitable than their Greater Minnesota counterparts,” an average sales of $2.8 million compared to about $888,000 in greater Minnesota stores.

Stores in five cities — Dundee, Lake Wilson, Ellsworth, Heron Lake and Okabena — were among those reporting net losses in 2007 and at least one of the two prior years, meaning city officials were required to hold a public meeting concerning the future of their liquor store(s) in 2008. The Lismore liquor store also reported losses in 2007, and closed that same year.

Things are looking up in the Okabena store, which changed managers in May of last year.

“According to our auditor, it’s turning around. It’s going to take a little time, but it’s turning around. The new manager is accomplishing a great deal,” said Kathy Krueger, who served as the city clerk in 2008. She said a public meeting last year revealed residents’ desire to see the store, which also serves food, remain open.

“It’s a gathering spot for those in town,” explained Krueger.

Tags: news, worthington, jackson, lakefield, pipestone, wilmont, windom, liquor, sales