May 18, 2012 in Business, News

Stores beefing up security for liquor

Post-Initiative 1183 privatization begins in two weeks
By The Spokesman-Review
 
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Mike Nelson, of Advantage Sales and Marketing, clears shelves at Fred Meyer on Thor Street in Spokane, as the store makes room for the sale of liquor starting on June 1. The items were moved to another aisle in the store.
(Full-size photo)

Map of this story's location
Retailers lined up

Washington’s Liquor Control Board, which has operated state liquor stores since the 1930s, estimates more than 1,300 liquor retailers will start selling alcohol next month.

This story contains additional information added on May 18.

Many grocery stores getting ready to sell liquor starting June 1 are spending thousands of dollars to prevent theft and secure their new inventory from walking out the door.

Rosauers Supermarkets will spend close to $20,000 at each of its 13 state stores to install additional video cameras, security caps on bottles, redesigned shelves and back-of-store cases to lock away inventory. That investment is meant to protect and deter theft of a high-priced item that Rosauers and every other private retailer has never carried before in Washington.

Rosauers CEO Jeff Philipps said the biggest investment – about $46,000 per store – is just to buy the liquor.

The other $20,000 per store may not be typical for the hundreds of other grocery stores that will join in selling booze starting June 1, the result of last fall’s voter approval of Initiative 1183.

Most major grocers declined to reveal how much they’re spending in preparation for June. Even the amount of liquor they plan to sell is competitive information they protect, the companies said.

Companies declining to provide details included Wal-Mart, Fred Meyer and Albertsons.

Philipps said Rosauers pays about $3 for every magnetic cap it’s attaching to bottles of spirits. Clerks will take off the cap at checkouts; bottles with caps leaving the store signal their presence with a loud alarm. They will be recycled for reuse, he added.

Joe Gilliam, president of the Northwest Grocery Association, said it is no surprise the supermarket companies will not identify how much they’re spending in preparation for June’s liquor sales.

“This is an extremely competitive industry. They’ll never talk about their security decision. Even if this was about eggs and not alcohol, they wouldn’t disclose how they’re going to operate,” Gilliam said.

Washington’s Liquor Control Board, which has operated state liquor stores since the 1930s, estimates more than 1,300 liquor retailers will start selling alcohol next month.

Out of concern for security the stores will place the liquor items near the customer service area, not near the beer and wine racks, Read noted.

The Trading Co., which operates stores in Spokane Valley, Cheney and on the Cheney-Spokane Road, has decided to hold off launching liquor sales for a number of weeks partly because planning for the stores is not completed, said company co-owner Gary Morgan. Morgan said security and protection of high-priced liquor is complicated and will take more time before Trading Co. adds those items to the shelves.

Very large-volume retailers like Costco have already been selling alcohol in other states and have established their systems of product selection and security, Gilliam said.

In Costco’s case, it won’t need magnetic top-caps or additional video cameras, said John McKay, a regional vice president in Issaquah.

“Our security system relies on our staff checking off all purchased items against receipts as a customer leaves the store,” said McKay.

The amount of money Costco spent supporting the initiative – in excess of $20 million – left voters with the impression the retailer wants to push aggressively into both the distribution of spirits and retailing. But McKay said Costco hasn’t yet decided what its plans are for statewide distribution.

At the store level, he said, most Costco locations in Washington will set aside a full aisle for spirits, and that will be near its beer and wine choices.

He said Costco stores will start with just 70 distinct alcohol choices, covering the typical choices for vodka, gin and whiskey.

Of those 70 options, fewer than 10 will be from Costco’s own Kirkland brand, McKay said.

He said Costco in Washington expects to set the same markups on alcohol here as it does in other states it sells liquor. That ranges from 3 to 14 percent. But he noted consumers in Washington will see prices for Costco items varying from what it sells those same items for in other states.

“We’ll base prices on the added taxes and fees the state requires,” he said.


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