Edina-owned liquor stores may experiment with online ordering and delivery next year as part of a new plan to attract more customers and boost profits.
The plan, presented to the City Council this week, is the product of a task force created after competition from large retailers dramatically reduced profits for three stores run by Edina Liquor.
At its peak in 2012, Edina Liquor’s municipal liquor stores (known as “munis”) brought in about $1.5 million in profits. That number fell to about $650,000 in 2015, and city officials estimate similar profits by the end of this year.
“It’s not insignificant, it’s just not what it was a few years ago,” Assistant City Manager Lisa Schaefer said. “This has been a trend statewide.”
The new plan — which Edina officials hope will bring liquor profits up to $1 million in 2017 — focuses on improving in-store customer service, advertising through social media and expanding the liquor selection.
The task force recommended starting a loyalty program for customers. It also suggested online ordering and delivery, taking a page out of Total Wine’s playbook.
Edina Liquor would adopt the service later in 2017, Schaefer said. Josh Furbish, the new general manager for Edina Liquor, was introduced to the council this week.
Paul Kaspszak, the executive director of the Minnesota Municipal Beverage Association, said task forces could become a “new standard” for struggling munis. He said he has heard of other municipal stores interested in delivery and loyalty programs, though he did not mention any specific locations. Some cities, like Hutchinson, Minn., allow residents to order products online and pick them up at the store.
Edina’s lower profits correlate with the opening in late 2014 of a Total Wine & More store near Interstate 494 and France Avenue. Overall, Minnesota’s 193 munis took a nearly $3 million hit in 2015. Munis have taken a long time to bounce back from the “Total phenomenon,” Kaspszak said.
“When the new guy comes into town … there is a natural inclination to check it out,” he said. “What we are finding is that the shiny penny is dulling and that customers are coming back for various reasons.”
The unveiling of the Edina plan comes as House Speaker Kurt Daudt, R-Crown, says the state could end its Sunday liquor ban next year. The change worries some who think it would put smaller businesses at a disadvantage.
“It’s a little bit out of our control, and if it ends up happening we’ll have to figure out how to navigate just like everyone else,” Council Member Kevin Staunton said.
All Edina Liquor profits go toward capital improvement spending and recreational services. The city, whose 2015 budget anticipated greater liquor profits, was forced in 2016 to reduce capital improvement spending and increase property taxes.
“The more profit we generate, the more money we can put into our capital spending without having to tax our residents for it,” City Manager Scott Neal said. “We want people in our community to care about it.”
Council Member Bob Stewart said he often hears residents say that cities should not be in the business of selling liquor. Edina has been doing it since 1948.
“We are not at a stage where that is a question we ought to wrestle with,” Stewart said. “That question was decided years ago, and trying to exit would be, I think, a terrible strategy for the city.”