November 22, 2011 in Business

Local retailers left behind by I-1183

Elaine Williams Lewiston Tribune
Associated Press photo

Michelle Smith stocks the shelves at the Washington state liquor store in Pullman on Nov. 9. Questions about the future of liquor sales abound since the approval of I-1183.
(Full-size photo)

Price, sales hikes likely

 Washington’s Office of Financial Management reported the present markup is 52 percent and anticipated the markup for alcohol in Washington will be anywhere from 52 to 72 percent under the new system.

 The agency also expects sales will grow by 5 percent because of increased access to liquor.

Albertsons, Safeway and Rosauers are preparing to be among the first businesses to line up behind Costco to sell hard alcohol in Washington, following the passage of a state initiative that privatizes liquor sales.

After that, it’s anybody’s guess about who’s going to jump into sales of booze.

One of the best ways to predict what will happen is probably by looking at which stores already carry beer and wine and meet the initiative’s requirement of being at least 10,000 square feet, said Brian Smith, a spokesman for the Washington State Liquor Control Board in Olympia.

Similarly, a good indication of what Costco will keep in stock might come from states where the warehouse store already sells hard liquor, and tends toward a limited number of varieties in half-gallon sizes, Smith said. Costco didn’t return calls left at its Issaquah headquarters.

Using Smith’s theory, alcohol would be appearing on the shelves of Bi-Mart in Clarkston, Walmart in Clarkston and Pullman and Dissmore’s IGA in Pullman.

Walmart and Dissmore’s are evaluating their options, according to spokespeople for the stores. Bi-Mart didn’t immediately return a call for comment.

Rick’s Family Foods and Heights Family Foods in Clarkston and Pomeroy Foods in Pomeroy are opting not to add liquor to their inventories.

The management of the two Clarkston neighborhood grocery stores favored the privatization of liquor sales, but not under the terms of the Costco-backed initiative, said Dave Clark, manager of Rick’s Family Foods. “The way the (initiative) was written, it was totally around larger chains, mostly wholesale. It doesn’t help small businesses.”

Under the existing conditions, about the only way a business like his could sell spirits would be to buy them at Costco then resell them, something that wouldn’t make any sense, Clark said.

Clark worries that hard liquor will be just one more item that draws consumers into Costco where they will spend money for other products like milk and eggs instead of at his store.

At Pomeroy Foods, the choice involves deciding how to make the best use of limited shelf space, said store owner Mark Schmidt. “Do you want to take out a row of Cheerios to put whiskey there?”

Wanting to sell liquor and having 10,000 square feet of retail space won’t necessarily equate to permission, Smith said.

Although the application has yet to be written, the rules around who gets the green light will probably look a lot like those for beer and wine, Smith said.

The license will be by location, not by retailer, Smith said. So Safeway, for instance, will have to get a license for each of its Washington stores, Smith said.

The initiative has a requirement that disqualifies vendors who have had more than one public safety violation in a two-year period, but they might be able to get around that in some instances, Smith said. A public safety violation includes offenses such as selling to someone who is obviously intoxicated.

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