Lakes Liquor in Detroit Lakes has been punching above its weight in profitability -- the city-owned liquor store came in No. 6 in the state last year on gross sales, bringing in $8.9 million before expenses, according to the recently-released State Auditor’s report for 2020.
That’s up there with Twin Cities-area municipal liquor store operations in places like Eden Prairie, Edina and Apple Valley, some with multiple stores that serve populations four to six times higher than Detroit Lakes.
After expenses, the Detroit Lakes liquor store brought in over $1.3 million last year. And the Detroit Lakes store did it efficiently, with a profit margin of nearly 15% — one of the highest in the state.
“I credit our liquor store manager, Randy Buhr, and his staff for just doing an incredible job,” said Detroit Lakes City Administrator Kelcey Klemm. “Throughout the pandemic they stepped up and accommodated extra customers coming in the door, delivering great customer service at every turn.”
As a city-owned enterprise, the liquor store generates revenues that help keep property taxes down. Last year the city transferred about $586,000 in liquor store profits to the general fund.
The high profit margin is “a testament to Randy and the tight ship they run over there,” Klemm said. “And every dollar that’s made as profit is either used to offset the tax levy or set aside for other projects — street projects, building projects, infrastructure projects. It’s really just a great resource to have to do other projects and programs in town.”
Other municipal liquor stores in the area that did well include:
- Perham, which had net profits of about $682,000, a profit margin of 15.4%, and transferred about $196,000 to the city’s general fund.
- Frazee saw net profits of about $30,000, a 5.1% profit margin.
- Ogema made more than $15,000 from its liquor store last year, with a profit margin of 4.4%.
- Vergas had profits of over $84,000, with an 11.5% profit margin, and transferred about $25,000 to its general fund.
- Hitterdal made more than $9,000 from its liquor store, with a profit margin of 2.6%.
Others lost money on their liquor operations.
- Lake Park, which operates an on- and off-sale liquor store and bar, lost more than $13,000 last year, or 1.6%. “We had a rough year because of the COVID thing — it’s tough when you’re shut down,” said Lake Park City Clerk Lonnie Neuner. “We’re doing fine now, we’re back to normal.”
- Mahnomen lost over $31,000 on its city liquor operations last year, or 3.1%.
- Callaway lost about $1,100, or 0.3%, but still transferred $3,300 from its liquor fund to its general fund.
- Ulen lost more than $23,000, or 7%.
- Wolf Lake lost nearly $31,000, or 13.1%, and did a negative $2,700 transfer into its liquor fund.
Here’s how some other city liquor stores in the area fared last year:
- Wadena made about $201,000 on its liquor operations last year, had a 7.8% profit margin, and transferred $182,000 into its general fund.
- New York Mills made over $54,000, had a 7.6% profit margin, and transferred $18,500 to the general fund.
- Battle Lake made over $137,000, a 6.9% profit margin, and transferred about $96,000 into its general fund.
- Pelican Rapids made more than $183,000 on its liquor operations, had an 11.4% profit margin, and transferred $109,000 to the general fund.
- Park Rapids made about $259,000 last year, on a profit margin of 7.6%, and transferred nearly $34,000 to the general fund.
- Fergus Falls made about $1.1 million, with a profit margin of 14.8%, and transferred $603,000 to the general fund.
- Bemidji made about $827,000 on its liquor operations, had a profit margin of 9.8%, and transferred about $16,000 to its general fund.