Off-sale liquor stores making gains in net profits

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WORTHINGTON — The city’s municipal liquor store fared well in a 2010 report recently released by the Office of State Auditor in March.

The annual report provides data for all municipally owned liquor stores. A majority of those stores are located in Greater Minnesota.

The combined net profit for all municipal liquor stores – both on- and off-sale — registered $21.7 million. The amount represents a 0.9 percent decrease from 2009.

On- and off-sale establishments registered an 11.9 percent decrease of net profit from 2009, while off-sale stores gained an increase of 0.3 percent.

In terms of net profit as a percentage of sales, Worthington Liquor Store ranked 11th among the 242 municipal liquor stores statewide.

Of the approximately $350,000 net profit gained by the Worthington Liquor Store, $200,000 was transferred to the city’s general fund.

To Worthington residents, city administrator Craig Clark explained, this meant the city did not have to levy an additional $200,000 for property taxes in 2011. Without dollars received from the liquor store, the levy increase in 2011 would have been about 7.5 percent higher.

“We’ve taken a lot of pride in running the liquor store like a business to be good financial stewards of our resources,” Clark said. “It helps to lower property taxes.”

As always, the tradeoff for not increasing property taxes would be to decrease services provided by the city.

The Worthington Liquor Store has a merchandise area of about 4,300 square feet.

Store manager Dan Wycoff explained since he has taken the helm of the store in September 2010, he has made several changes to drive sales. Changes include a new store appearance, increased inventory and enhanced employee training.

Wycoff said he has started a wine club and is in the process of initiating a beer club to create a more enjoyable shopping experience for customers.

“We send out invites to customers who want to be on the email list for on- and off-site wine tasting,” he said

Clark added the clubs serve as both educational and sales tools for the store.

Both Clark and Wycoff agree they want Worthington to be seen as a destination choice for purchase of alcohol.

“We don’t want people to leave the city to buy their spirits,” Wycoff said.

“The knowledge of the sales force helps with that,” Clark added.

Surrounding municipal stores

In surrounding areas, Pipestone, Luverne, Lakefield and Jackson — all off-sale liquor stores — made net profits in 2010.

The Avoca, Lake Wilson, Okabena and Wilmont liquor stores were among the 40 establishments that registered net losses in 2010. The latter three stores were required to conduct public hearings. Stores that show a net loss in two of the past three years are required to organize a public hearing.

Avoca City Clerk Karen Frisk explained despite the net loss incurred in 2010, sales were better last year.

“The store management changed in January 2011,” she added. “We’ve not needed a public hearing yet.”

Statewide, there has been a 16 percent increase in net profits for off-sale liquor stores from 2005 to 2010. On-sale stores, on the other hand, saw a significant decrease of 35.7 percent in net profits.

Daily Globe Reporter Ana Anthony can be reached at 376-7321.

Tags: news, off-sale, liquor, stores, making, gains