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Wells mayor questions keeping liquor store

By Staff | Jul 19, 2010

Mayor Shannon Savick says the Wells Liquor Store, pictured above, is losing money and may need to be shut down.

The Wells municipal liquor store isn’t closing its doors anytime soon, but a city official is concerned about losses the business may be facing in the future.

Wells Mayor Shannon Savick says council members should be looking at ways to make the On-Off sale liquor store more profitable.

That was the mayor’s message at Monday night’s council meeting.

Savick outlined a bleak financial outlook for the business, projecting a loss of $15,177 for 2010.

Revenue so far this year, she adds, is averaging $2,200 a month less than last year.

“If we aren’t going to be making any changes, we might as well shut it down. We are losing money,” Savick told the council.

Councilman Steve Burns says a 2005 audit by the Minnesota Municipal Beverage Association questioned whether a liquor store the size of Wells’ needed three full-time employees.

Burns is a member of the city’s safety committee that oversees operations of the liquor store.

Burns says Savick’s concerns are a starting point that will be discussed by committee members that includes council member Ashley Seedorf and City Administrator Jeremy Germann.

“We have to really study the problem before making any quick decisions. We have to be cautious when evaluating the figures,” he says. “I really don’t think it’s that serious.”

In 2009, the liquor store had a loss of $14,982 before $25,000 was transferred out of the liquor fund.

The business in 2008 actually finished with a profit of $13,235, but had a loss of around $6,700 when $20,000 was taken out of the liquor fund.

Council members were given a handout comparing 33 On-Off liquor stores with an annual income between $500,000 and $900,000 in 2008.

The figures show only six had gross profits that were less than Wells.

Savick says the city of Mapleton had gross income of $661,458, ending up with a gross profit of 40.60 percent and 6.3 percent net profit.

Wells, on the other hand, with income of $689,740 posted a 34.2 percent gross profit and a net profit of 1.9 percent.

“It would behoove us to see what they (Mapleton) are doing,” says Savick.

Under state law, a public hearing is required to discuss the liquor store’s future when it has a loss for three straight years.

The council voted to have the safety committee contact someone at the municipal beverage association for advice.

City officials could opt to close the on-sale portion and maintain the off-sale.

To close the municipal store, the public would have to vote to get the city out of the liquor business.