Marshall’s municipal liquor store ranks high in report

MARSHALL – A recent report from the Minnesota State Auditor’s Office showed Marshall’s municipal liquor store was doing well in 2011, ranking among the most profitable municipal liquor stores in the state. It’s a positive sign, not just for the liquor store, but for the city, which benefits from the money the store makes.

Last week, State Auditor Rebecca Otto released a report analyzing municipal liquor store operations in 2011. The report found that municipal liquor stores statewide reported record sales, with a total of $317.2 million in sales spread out among 114 cities. Sales totals increased for the 16th straight year, the report said. Total net profits were also up for municipal liquor stores, and fewer stores reported net losses than in 2010.

The Marshall municipal liquor store reported net profits of more than $491,000 in 2011, and transferred more than $1.4 million into city funds, the auditor’s report said. The Marshall store ranked ninth in the state for net profits as a percent of sales and 24th for gross sales. The store’s net profits were 13.8 percent of sales, the auditor’s report said. Coming in first in the ranking was the Paynesville municipal liquor store, with profits accounting for 22 percent of sales.

Scott VanMoer, manager of the Marshall municipal liquor store, said Monday that he had not yet had the chance to read the state auditor’s report. However, he said he and the Marshall store staff work to keep the business as strong as they can.

Profits generated by municipal liquor stores can provide extra revenue for the cities operating them. In Marshall, funds generated by the liquor store have sometimes been used for city projects.

One of the most recent examples was a total $1 million contribution for the construction of the Marshall-Lyon County Library. VanMoer said the liquor store was set to make four annual transfers of $250,000 for the library.

Statewide, municipal liquor stores transferred a total of $20.1 million to their cities in 2011, the auditor’s report said.

Not all area municipal liquor stores ended 2011 in the black. The auditor’s report listed several area stores with net losses, including those in Hanley Falls, Ivanhoe, and Tracy. However, the report noted that municipal liquor stores with on-sale operations also tend to have higher operating expenses. On-sale operations also tended to have less of an increase in sales over the past five years.

There are challenges that face municipal liquor stores, especially ones in rural areas, VanMoer said. VanMoer said the Marshall store does have an advantage in Marshall’s size, and in the fact that the city draws in people from the surrounding area to work or shop. But liquor store staff still need to build up a customer base and sales, while carefully managing inventory, pricing and costs.

“It’s buying products at the right time,” and in the right amounts, VanMoer said. That’s not always easy to do. “There are more and more new products coming out every day,” he said, and many customers are looking for a wider selection in the liquor stores they visit.

Even factors like the weather can have an effect on sales, he said. Fewer people will be out shopping during bad weather, compared to a weekend when it’s warm enough to fire up the grill.

VanMoer said having good staff was an important asset for the Marshall liquor store.

“It all goes to having a knowledgeable staff. We try to help customers with any questions we can,” he said. That can extend to helping customers with wine or beer suggestions. “It seems to go a long way.”