Dan Condon pours customers coffee with Irish cream and offers them special discounts, hoping to entice shoppers to do what Minnesota long prohibited: buy alcohol on Sundays.
Despite customers’ initial excitement, many store owners said the advent of Sunday sales in Minnesota six months ago has been more of a burden than a boon.
“We generate hardly any new sales,” said Condon, who owns United Liquors in Bloomington. “It definitely costs us money.”
The state is collecting more tax revenue from beer, wine and spirits, a sign that sales are up. Businesses near the state’s borders and those next to grocery stores and malls have seen a boost, store owners said. But for the most part, liquor store owners say profits have remained flat, said Minnesota Licensed Beverage Association Executive Director Tony Chesak, who opposed the historic change.
In the first six months since Sunday sales took effect, the state netted $40.3 million from alcoholic beverage taxes. That’s about $2 million more than the state made, on average, during the same time period in the previous five years. Minnesota Management and Budget Commissioner Myron Frans said he has not yet analyzed what role Sunday sales could have had in that 5 percent increase in revenue.
“It’s logical to assume at least part of it is attributable to [Sunday sales],” Frans said, though growth in the economy and sales overall could have contributed.
Lots of factors to consider
It will likely take another year before they will fully understand the impact of being open seven days a week, store owners said. The novelty of the change, along with the Vikings’ strong season, a spate of holidays that landed on Sundays and the increased popularity of expensive craft beer and spirits could bolster sales, owners said. But many said the operational cost of staying open seven days a week is largely negating any increased revenue. Some sales at breweries, convenience stores and Wisconsin liquor stores have also been affected by the change.
State Sen. Jeremy Miller, R-Winona, said his goal wasn’t new revenue when he sponsored the bill to allow Sunday sales last year. Residents had been pushing for the change for years, and businesses along the state border were tired of losing money to Wisconsin stores, he said. Since the change in July, Miller said the response from store owners in his area and shoppers has been overwhelmingly positive.
“The consumers here felt like it was an absolute no-brainer,” he said.
Andrew Schmitt is one of the happy customers. He created the advocacy group Minnesota Beer Activists and fought to make Minnesota the 39th state to offer Sunday sales.
Shoppers’ only complaint is they want the stores to open earlier than 11 a.m. on Sundays, Miller and Schmitt said. The state limited Sunday operations to 11 a.m. to 6 p.m. as a concession to store owners who didn’t want to pay for a full day of operations.
Sunday sales are not mandatory. Some liquor stores opted out and the Ely City Council even chose to continue the Sunday ban in that city. But Chris Arnold, who manages Bagley Liquors, a city-owned liquor store, said the store couldn’t stay closed when private businesses around it were open.
“Sunday wasn’t as much an option as people said it was,” Arnold said, noting that he needs to do everything possible to care for his customers or they will shop elsewhere.
When Minnesota Municipal Beverage Association members met in October, the vast majority said they were open on Sundays, Executive Director Paul Kaspszak said. While results have varied depending on stores’ locations, he said the change generally has not been a big moneymaker for city-owned liquor stores.
Sunday side effects
Sunday sales have not just affected Minnesota stores.
Minnesotans with a last-minute need for booze have long made Sunday liquor runs to Iowa, Wisconsin or the Dakotas. Store owners across state lines said they were prepared for a drop in sales in July.
“Sundays are little quieter,” said Brian Siedschlag, who manages Chicone’s Liquor Mart in Hudson. He said the store is in a good location and hasn’t seen significant losses.
Miller and Budweiser distributors who work in the southwest corner of Wisconsin, near the Minnesota border, have also noticed a dip in sales since the law took effect, said Pete Madland, executive director of the Tavern League of Wisconsin.
Chad Moe, who owns liquor stores in Minnesota and Wisconsin, said it will take a year or two to discern the full impact on his businesses. So far, he said he hasn’t seen a windfall at his Minnesota locations and sales at his Hudson store have dropped slightly, but customers like the convenience.
“I have heard some stories about other locations that have really taken a beating so I consider myself lucky,” Moe said in an e-mail.
Breweries were also watching the Sunday law closely. They temporarily had the market cornered on Sunday to-go sales of full-strength beer, which is generally sold in jugs called growlers. Staff at Twin Cities breweries Urban Growler and Indeed have noted a drop in Sunday growler sales. At Indeed, they’re are down about 50 percent.
Increased competition is a factor, staff said. But they are not particularly concerned. Both companies sell canned beer at liquor stores and said that while growler sales have dipped, can sales are up.
Convenience stores, which have long been able to sell low-alcohol 3.2 beer on Sundays, have seen huge losses, said Lance Klatt with the Minnesota Service Station and Convenience Store Association. Minnesota is one of the few states left in the country where 3.2 beer is sold. It is the only type of brew convenience stores and supermarkets are allowed to sell.
With the Sunday sales fight settled, Klatt expects the next legislative battle will be allowing convenience and grocery stores to sell full-strength beer. Kaspszak, with the municipal liquor store group, has heard such “rumblings,” and he’s worried.
“Do we want alcohol to be sold everywhere?” Kaspszak asked. “You get beer, and two years later it’s wine, and two years later it’s spirits. And then all of a sudden you are trying to put the genie back in the bottle.”