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Two county liquor stores do okay, but, 2 show a loss

By Staff | Jan 5, 2020

Two of the four municipal liquor stores in Faribault County showed a loss in the year 2018. And, while the other two showed a profit, one of those just made it into the black ink by .1 percent.

The municipal liquor store in Blue Earth showed a strong profit margin for 2018, according to a recent report from State Auditor Julie Blaha on how all of the city-owned liquor stores in the state performed.

Blue Earth’s Wine and Spirits store showed an overall net profit of $89,905 for 2018. The store had overall sales of $1.615 million.

Blue Earth’s numbers put them into 101st place for best profit percentage out of the 190 municipal liquor stores in the state.

“Our operations have been strong and have generated a nice profit,” Blue Earth city administrator Tim Ibisch says. “We have increased our hours some with Sunday, so our expenses are up a little, but our manager and staff do a good job of running the liquor store.”

Wells also showed a profit, which was $1,012 and came after a $7,000 transfer of funds into the liquor store account, according to the State Auditor’s report. Wells’ gross sales were at $771,604.

The profit margin put them into 152nd place on the state list.

“We have been treading water for a few years,” Wells city administrator CJ Holl says. “So it is nice to have at least a very small profit.”

Holl says the $7,000 transfer into the liquor store fund was from the city’s share of lottery tickets sold at the store.

“We anticipate our move to our new building will boost our sales and profit,” Holl says. “Like any retail business, location is important. With it being an attractive upgrade, more inventory and a higher traffic location, it will be good.”

The liquor store run by the city of Kiester ended up in 179th place, showing an overall loss of $10,458. Their total sales were at $183,729.

The Elmore liquor store ended in 189th place, out of 190 stores, with an overall net loss of $19,862. The store showed sales of $128,483.

When it came to amount of gross sales, Blue Earth was in 62nd place in the state, Wells at 99, Kiester at 180 and Elmore at 183.

Total sales for all the liquor stores in the state was at a record $360.2 million.

No. 1 in the state was Lakeville with sales of $15.276 million. The store with the lowest amount of sales was Elmore with its $128,483. (There were seven stores with lower sales than Elmore, but they had all ceased operations sometime in 2018.)

Elmore also had the highest percentage of operating expenses as a percent of sales, at 39.2 percent.

According to the State Auditor’s report, there were 36 cities required to hold public hearings in 2019, due to showing losses in two of the last three years at their municipal liquor stores.

Kiester, Elmore and Wells are on that list.

Out of the 15 stores in the South Central Region of Minnesota, only Fairmont had higher sales, at $3.8 million, compared to Blue Earth’s $1.6 million.

As far as net profit, Fairmont was first with $630,638 and St. James was second with $135,825, and Blue Earth third with its $89,905 in net profit.

The Blue Earth liquor store also showed net transfers out of it’s liquor store fund of $320,000.

“That was a designed transfer out,” city administrator Ibisch said. “In 2018 the city had decided to make a loan towards the new Chamber Giant Welcome Center, as well as making a $200,00 donation towards the project. That donation came out of the liquor store fund. And so did the funds for the new slide at the pool.”

Most years the city transfers money out of the liquor store fund for some type of community or park project, Ibisch said. But it is usually between $50,000 and $100,000.

“There really is no reason to keep letting that fund grow,” Ibisch said. “We keep a good balance in it, but it doesn’t need to grow higher than needed, so we can transfer funds out for special projects.”