Sales tumble at city liquor storesSales and profits dipped at Alexandria’s two city-owned liquor stores last year. But the stores still made enough money to transfer $400,000 into the city’s general fund, which has the effect of lowering property taxes, according to City Administrator Jim Taddei.
By: Al Edenloff, Alexandria Echo Press
Sales and profits dipped at Alexandria’s two city-owned liquor stores last year.
But the stores still made enough money to transfer $400,000 into the city’s general fund, which has the effect of lowering property taxes, according to City Administrator Jim Taddei.
The Alexandria City Council approved the audits for Downtown Liquors and Plaza Liquors at its meeting Monday night.
Sales at the downtown store decreased 6.2 percent, from $2,287,074 in 2009 to $2,145,171 in 2010, according to Dennis Schmidt of LarsonAllen, who presented the audit.
The store’s expenses increased 6.9 percent, from $311,291 to $332,860.
It still, however, was able to make a profit of $103,774, which is about half the amount it made in 2009, $201,577.
Plaza Liquor experienced a similar slump. Its sales fell 7.8 percent, from $3,151,333 in 2009 to $2,902,694 last year.
Its expenses increased from just under $400,000 to $417,571, a 4.5 percent jump.
Plaza Liquors was still comfortably in the black, however, ringing in a profit of $161,163, which was a big dip from 2009’s profit of $294,991.
Although the numbers were down, Schmidt said that the stores were doing much better than the off-sale liquor industry nationwide.
The stores’ combined net operating income, for instance, was 5.2 percent, compared to the industry’s average of 2 percent, Schmidt said.
The Alexandria stores also kept operating costs down with combined operating expenses of 14.9 percent, much lower than the industry’s average of 20 percent.
With its profits and reserve funds, Downtown Liquors transferred $175,000 into the city’s general fund and Plaza Liquor contributed $225,000 – the same amounts as in 2009.
After the audit was presented, council member Virgil Batesole said that it bothers him that the city considers the liquor store transfers into the general fund as “profits” when some costs, such as clearing the stores’ parking lots of snow and maintaining flowers, are not included in the expenses.
Batesole said the city is also losing out on the opportunity of a private entity using the land, which the city could sell and collect taxes on. He said that a detailed return on investment should be calculated to make sure the city is using its dollars wisely by operating the liquor stores.
Council member Sara Carlson said that over the course of the last seven years, the liquor stores have generated enough money to transfer $2.65 million into the city’s general fund, which benefits the council’s constituents. She added that flowers and parking lot maintenance are minor expenses in comparison.
Carlson said “there’s no way” the city could make as much money on the properties for some other use.
Council member Owen Miller agreed, saying that he studied the return on investment years ago and could not find a better alternative.
Schmidt concluded that the money from the two liquor stores are like a “lifetime annuity” that continues to yield income year after year.
The council approved the audit on a 5-0 vote. The full audit will be available on the city’s website soon.
In addition to approving the audit for the liquor stores, the council took action on a variety of other issues Monday night.
It voted 4-1 to pay the monthly bills after Batesole raised concerns that the council was over-spending its budget in several different areas.
The council also agreed to issue an on-sale liquor license to the Alexandria Golf Club; approved a request from “Let’s Go Fishing” to have a walk and pontoon rides near City Park on June 4; designated a section of 4th Avenue as a state-aid street; learned that it will receive federal funds for pedestrian crossing improvements on Geneva Road and 3rd Avenue; and asked for more details about Shell Oil’s request to install monitoring wells at Gary Martin Hope Park; and scheduled a public hearing to talk about improvements on Cardinal Lane.
Read upcoming issues of the Echo Press for more council news.
Beer is king
Beer, once again, accounted for the largest percentage of sales at the two city-owned liquor stores but wine and liquor sales continue to gain ground. Here’s the breakdown of the 2010 percentage of sales (2009 figures are in parenthesis):
Beer – 49 percent (50.2 percent)
Liquor – 32.4 percent (31.7 percent)
Wine – 14.8 percent (14.3 percent)
Miscellaneous – 3.8 percent (3.8 percent)