Liquor sales back on track
After seeing a dip in sales last year, the Detroit Lakes municipal liquor store is making a comeback, slowly but surely.
The overall revenue for Lakes Liquor decreased about $294,000 in 2012.
“Obviously, when Seven Sisters opened, that had an impact on our business, but part of that is the facility we were in, we just couldn’t sustain much additional growth,” City Administrator Bob Louiseau said.
Seven Sisters Spirits, located on Highway 59 South, opened near the end of May 2012. That month, the city liquor store took just a slight hit, about $1,700. It was the following months that the larger declines took place.
During the summer months, usually a lucrative time for obvious reasons in this area, June saw a decline of 11 percent, July saw a 19 percent decline, August saw an 11 percent decline, and September saw a decline of 18 percent from the previous year.
After the new Lakes Liquor store opened in November though, numbers started to climb again. November saw a year-over year increase of 2 percent, and December of 1 percent.
“As we opened our new facility and started developing things, we climbed back into a pretty competitive position,” he said. “We’ve experienced some steady growth.”
He said the council saw the need for the larger facility and approved the $6 million project because it was getting difficult to sustain the sales. Detroit Lakes’ municipal store has been one of the top grossing city-owned stores in Minnesota over the years.
Since at least 2006, revenues have increased each year until 2012. Revenues went from $4.3 million in 2006 to $4.6 million in 2007, $4.7 million in 2008, $5.1 million in 2009, $5.2 million in 2010 and $5.2 million in 2011.
Last year, it dropped to about $4.9 million.
After liquor store manager Brad MacMaster resigned from his position, there was no manager in January, February and March of this year.
During that time, Louiseau and City Finance Officer Pam Slifka, along with help from assistant manager Tom Orvik, ran the liquor store.
“We’ve been able to sustain things. What we’re hoping will happen over time, obviously, with Jim’s experience and knowledge, that he’ll be able to continue and grow that business,” he said of Jim Watland, Lakes Liquors new manager who started April 1.
Louiseau said that although he wishes good things for Seven Sisters Spirits, he also hopes it doesn’t take business away from the city’s municipal store because the revenue from the store goes to pay for many, many things in Detroit Lakes.
It supports many of the donations to non-profit organizations looking for support, it helps keep taxes down for city residents, and it helps with funds to support the community center.
January and February saw revenue numbers increase for the liquor store, but then numbers in March dipped slightly again. That likely doesn’t have so much to do with competition as it does with the winter weather.
“I think it’s primarily because in March of 2012, the average temperature was in the 60s, and this year it was in the 20s,” Louiseau said. “That does affect business — at least our business.
“This time last year, there were more people golfing, more people in the area opening their cabins and those kinds of things. It’s just not been that kind of year.”
Though the last year has been a little bit of a struggle for the liquor store, Louiseau said he has no regrets about building the new liquor store, and hasn’t heard any from others either.
“The numbers never fell far enough … If they would have gone down to a level that, ‘oh my gosh, we have enough space downstairs (in the former liquor store space).’ Even with the lower numbers, we still would have struggled with the same problems we had.”
A feasibility study on the new liquor store found that a city the size of Detroit Lakes needed a 10,000-square-foot building. The old building was only about 5,000-6,000 square feet.
Louiseau said that with the addition of Watland to the staff, the liquor store will continue to improve the customer shopping experience, and hopefully sales as well.
“There’s no question, it’s a big challenge,” he said about Watland coming to run the new liquor store after a bit of a struggle. But, he also thinks the city has the perfect guy for the task.
“I hate to say this but he knew more in one week than I did in three months,” Louiseau said with a laugh.
Follow Pippi Mayfield on Twitter at @PippiMayfield.