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January 5, 2012 in Washington Voices
Liquor store owners weigh options: For some, it’s last call
Greenacres Liquor Store manager Natalie Murphy and owner Keith Peterson plan to stay open.
(Full-size photo)
Owners of liquor stores that contract with the state of Washington have a choice to make in the coming months – whether to try and stay open under the new rules that completely remove the state from the business.
Right now the state controls the supply of liquor. Stores order it but don’t have to pay the state for it until they sell it, taking a commission on the sale price. Under the new rules store owners will have to buy liquor with cash up front from distributors. Meanwhile, no one is sure who will be distributing the liquor or how much it will cost.
“Supply could be an issue,” said Natalie Murphy, manager of the Greenacres Liquor Store. “I don’t know how we’re going to work that out yet.”
“Right now we don’t know who we would buy our liquor from or what our price would be,” said Ray Skalstad, owner of the Pumpkin Patch near 57th Avenue and Perry Street. He started his business 35 years ago selling pumpkins and produce.
What is known is that the state will start to divest itself of the business on Sunday, said Murphy. Distributors can start selling liquor on March 1. Stores will not be allowed to sell state-supplied liquor after June 1, she said.
Cal Farrer, owner of the Liberty Lake Liquor Store, said he believes prices could go up 27 percent. He blames Costco for financing the initiative effort to get the new law passed.
“They just put about 2,000 people out of work,” he said. “Nobody looked at the deal. All they saw was get the state out of alcohol.”
Some store owners are cautiously optimistic that they can keep their doors open while others are preparing to shut down. “We’re going to close,” Farrer said. “I am just not going to put up with this. I am not going to stay open until midnight or 1 a.m. just to compete with the big-box stores.”
Greenacres Liquor Store owner Keith Peterson said he plans to keep his business of 25 years open. His restaurant clients have promised to stick by him, he said. He made the decision in part because of his five employees. “We feel obligated,” he said. “All these people have been working for me and doing a good job. There’s nothing anyone can do. You just have to move forward.”
“I think if we can do at least half of what we’ve been doing, we’ll be all right,” Murphy said. “The location is good. We have a lot of local people who shop here.”
Skalstad, 84, said he’s near retirement and isn’t sure if he’ll keep his store open. “That enters into it,” he said. “I really like working. It’s kind of still up in the air.” He will at least stay open until he can’t get merchandise any more, he said.
Bud Kirihara, owner of the Millwood Liquor Store, said he’s going to give it his best shot. “We’re going to try,” he said. “That’s about all we can do, really. What else am I going to do? I have employees. I think I can make it here.”
He will be counting on his steady customers to keep him afloat, Kirihara said. “We’re going to try to stick it out.”
Currently liquor stores are banned from advertising, having sales, delivering alcohol or soliciting new business in any way. All that will change under the new rules, Peterson said. He plans to create a website and put up a Facebook page. “There’s just a whole new ballgame,” Peterson said.
The decision to close affects more than the employees that will be out of work. Jenell Farrer, who works in the Liberty Lake Liquor Store with her husband, said their store contributed more than $95,000 last year in taxes to the city of Liberty Lake.
Cal Farrer said he is worried about what will happen to his three employees. “One of them, her husband just got cancer,” he said. “I don’t know what those poor people are going to do.”
He plans to stay open as long as possible, Farrer said. “I’d like to stay open until May 31,” he said. “There’s so many things that could happen.”
Even as they grapple with their new reality, some of the owners are concerned about minors having more access to liquor. Peterson said he has 14 surveillance cameras inside and outside his store. If a car full of people pull up and only one person comes in to buy, Peterson or one of his employees will go out and make sure they’re all over 21, he said. “That’s something the big places like Costco will not do,” he said.
Cal Farrer said he’s worried about Costco selling alcohol in three gallon jugs. “The State of Washington was so responsible,” he said. “They spurned profits in order to sell responsibly. Their attitude was great. This wasn’t broken.”
Time will tell if the small liquor stores will be able to compete with the big-box stores. “It’s a roll of the dice,” Farrer said. “These people that stay in it, I wish them well.”
Greenacres Park opening set for Saturday 
RedCedar on January 05 at 9:26 a.m.
That’s just silly. All the mini-marts, beer markets, gas marts, etc sell the same stuff that the big-box stores do, and they seem to survive just fine. Sure, if his store was right next to Costco and kept the same hours as Costco, he’d have to compete on price and he’d lose. But he’d also lose on everything else he sells that people could get cheaper by going to Costco. Does he feel the same way about Costco selling candy bars, paper towels, wine, donuts, and baby diapers? Of course not. He doesn’t attempt to compete with Costco on price, and they don’t attempt to compete with him on convenience.
Costco is inconvenient as hell. They open late and close early, especially on weekends. They don’t have half the stuff you want, and what they do have, you have to buy in huge packages. To top it off, you have to pay $50 just for the privilege of shopping there.
akastretch on January 05 at 11:43 a.m.
These operators will need to consider things very carefully, it is a major change in their business models especially with regard to cash flow. There will be distributors selling the liquor and the cost to these operators on name brand goods will be higher, but exponentially higher, than the grocers and big box stores, but that is true of many other categories as well. Their restaurant customers will likely be buying from wholesalers bringing it to their doors at roughly the same prices as the liquor stores will be getting it for. In my opinion they will need to evaluate their financial situation, location and proximity to competitors and the type of competitors they will be up against. Most of the grocers will have relatively small selections as compared to the liquor stores, so if I am a contract liquor store owner, have the financial resources and I am not in a strip mall next to a major retailer then I would….seriously consider trimming selection on the low end to what I absolutely need to cover that base (because cheap private label liquor will be abundant at Costco and major grocers), maximize selection of premium spirits, bring in a lot of refrigerated craft beer and expand offerings of wine (particularly small Washington wineries). I would seek to follow a business model similar to Bev-Mo or Total Wine and become a beverage shopping destination.