A pandemic didn’t slow sales at the two city-owned liquor stores in Alexandria.
In fact, they flourished, ringing up more than $7.15 million in gross sales during 2020. That’s a 14% increase or nearly $900,000 more than 2019’s sales of $6.26 million, according to Andy Mellgren, manager of the Downtown Liquor and Plaza Liquor stores.
Mellgren presented his annual report to the Alexandria City Council on Monday, Feb. 8, and it was unanimously approved.
In order to achieve those sales numbers, however, the operating expenses at the stores increased, according to Mellgren. He said the buildings – the Downtown store was built in 1962 and the Plaza store in 1985 – have required a lot of upkeep and projects.
The cost of alcohol products also increased, Mellgren said, as national suppliers did not always offer traditional deep discounts on large quantity purchases because of the unexpected surge in consumer demand brought on by COVID-19.
Still, the busy year of sales allowed the stores to transfer $240,000 into the city’s general fund, $20,000 more than the previous year. Since 2014, the stores have contributed more than $1.2 million to the general fund, Mellgren said.
This past year, the money was used to support the city’s park department.
“The money spent here at Downtown and Plaza liquor truly stays here in our community, providing value to our residents,” Mellgren said.
In his report, Mellgren said that customer service plays a key role in the stores’ success.
“We want our customers to feel like guests, not just a number,” he said. “We work on salesmanship, product mix, as well as the flow and design of the stores. Another important aspect of training involves knowing and recommending locally owned businesses and restaurants. Shop local, support local is an important piece of our service philosophy.”
The liquor stores faced big challenges in 2020, Mellgren told the council.
“The safety and well-being of our staff and our customers became our top priority,” he said in his report. “Increased operating expenses included personal protection equipment, staff shortages, cost of goods for sale, cleaning supplies and utilities. We also began offering curbside service.”
During the first nine months of 2020, the stores struggled with low staffing levels because of the pandemic, according to Mellgren.
“This caused us to reduce our operating hours in order to serve our customers while allowing us to maintain the store's sanitation as well as staff and customer safety,” he said. “Our industry partners also faced staffing issues, which forced us to adapt to changing delivery schedules throughout the year.”
In September, the council approved the addition of three new full-time sales associate positions for the liquor stores, which allowed the stores to keep up with demand, Mellgren said.
The pandemic changed how customers bought beer, resulting in more large volume purchases.
“We believe that our customers were making an attempt to avoid multiple trips, which did lower our customer counts somewhat,” Mellgren said. “However, the result was a higher average ring each day per customer.”
Heavy demand for alcohol products led to shortages of some items. Both liquor stores ran out of their number-one selling beer for two weeks in August, Mellgren said.
Mellgren added that customers were seeking value. “They really liked that we kept many products on feature and sale pricing,” he said. “Many liquor stores throughout the state reduced sale and featured items.”
Other trends in 2020: An increase in demand for ready-to-drink and pre-made cocktail options, continued high demand for seltzers, and an uptick in non-alcoholic wine and beer sales.
Here’s a breakdown of the types of alcohol customers were buying at both stores:
Beer – 47.5% of all sales.
Liquor – 33% of all sales.
Wine – 17% of all sales.
Other, such as ice, pop and non-alcoholic items – 2.5% of all sales.
Locally made products sold well at the liquor stores. Copper Trail Brewing Company accounted for 1% of the stores' beer sales, Carlos Creek Winery accounted for 4% of all wine sales and Panther Distillery in Osakis accounted for 1% of all liquor sales, Mellgren said.
A look ahead
For 2021, Mellgren said the liquor stores are working with Cybersprout to develop a website that would allow them to offer online shopping toward the end of March or mid-April.
They’re also working on improvements – completing flooring and shelving projects at the Downtown store; a new interior exit door at the Plaza store; and interior painting has been completed at both stores.
The liquor stores will continue their community partnerships with the Humane Society and Outreach Food Shelf. Specials and features are planned in April and customers will be asked to donate time, supplies and/or cash for the Humane Society. The stores plan to do the same thing in October for the Outreach Food Shelf.
“This is important to us as it provides value to our community,” Mellgren said.