Liquor stores neared sales records for 2020 as bars, restaurants closed

It started in March when workers witnessed near panic in liquor stores as customers stocked up on liquor, beer and wine with almost as much frenzy as toilet paper.

Customers feared the liquor stores would be deemed nonessential as the coronavirus pandemic hit the state and forced to close in the spring like malls and restaurants.

They weren't, and as restrictions continued for restaurants and bars, sales more than doubled in March and April and stayed strong the rest of the year.

"2020 was one of the best years we've ever had in more than 100 years in business," said Matt Morelli, chief operating officer of Morelli's Discount Liquor & Meats in St. Paul. "Our sales are up double digits over last year. But with bars and restaurants being closed, the game was rigged."

Nancy Raines, manager of Longville Lakes Bottle Shop in Longville, about three and a half hours north of Minneapolis, said her business was up 117% early in the pandemic compared with last year. It was still up more than 40% in November because of the large number of visitors who have remained in vacation homes in lake country during the pandemic.

"Shortages of product are still an issue with the increased business," she said. "I recently ordered 168 cases of random beers, wine and liquor and only 38 showed up."

Statewide, gross liquor receipts for the year through October increased about 20% to almost $32 million for municipal and nonmunicipal stores, according to the Minnesota Department of Revenue.

Despite near-record sales in stores, total alcohol revenue for the state declined about 10% through October due to pandemic-related restrictions at bars and restaurants.

The pandemic required all retailers to tweak their business models, including liquor stores. Consumers' buying habits changed, forcing liquor employees to stock differently, institute multiple safeguards to keep shoppers and employees safe, and add or expand delivery and curbside pickup.

Shoppers at the stores bought more but made fewer trips, similar to patterns at other retailers deemed essential such as supermarkets. Tequila, whiskey and boxed wines appeared more often in shoppers' baskets.

"Customers are buying a suitcase of Coors Light or Bud Light rather than a six-pack of craft beer," said Ted Farrell, president of Haskell's. "It was definitely a stock-up mentality until the aluminum can shortage hit."

Judd Greenagel, owner of Liquor Boy in St. Louis Park, saw customers trading up.

"They were buying $20 bottles of wine instead of $10 bottles," he said. "They were rewarding themselves for staying in."

Greenagel had hoped to add one or two new locations in 2020 but had to delay the expansion due to the pandemic.

"We're having the best year we've ever had, but it's all due to other people's misfortune," he said. "I'd rather have a normal year where we're not wearing masks and gloves and worrying about employees getting sick. We're plenty busy even without a pandemic."

Paul Kaspszak, executive director of the Minnesota Municipal Beverage Association, said the 30 to 40% increase in sales this year at munis came under trying circumstances.

"My members are out there in this petri dish of an environment," he said. "Liquor stores are smaller than grocery stores, so it's not as easy to social distance. Employees get home from work and take their clothes off to wash them. I don't think they get enough credit."

Some retailers such as Rogers Wines & Spirits in Rogers started spraying all bottles throughout with disinfectant to keep employees and customers safer. The bottles and shelves are misted daily.

"It doesn't compromise the labels or have an odor," said Rogers' liquor operations manager Gary Buysse. "Most of our customers really appreciate the extra sanitizing steps we take, and the anti-maskers can always use curbside pickup."

Curbside pickup will likely be a permanent addition in retail, but it wasn't widely used by liquor stores, according to some owners.

"Curbside is much more work to take in a small amount of dollars," said Jim Morelli, CEO of Morelli's, which only accepts cash and checks for payment. "You're writing up the order, shopping the order, taking it out to them, getting their check and bringing them change or a receipt. It takes more people to accomplish the same end."

Many of the bottle shops added employees to handle the spike in business, if they could find them.

"I hear it from municipal shops all over the state that they can't find help," said Kaspszak. "We pay $13 an hour and some cities pay benefits too, but we're still desperate for help."

With drinking from home on the upswing, did alcohol-related incidents increase? Yes and no. Arrests for driving while intoxicated declined by 18% through mid-December to 21,894 statewide, according to the Minnesota Department of Public Safety.

The Department of Health reported that emergency-room visits statewide fully attributable to alcohol declined 12% in March through June.

The Centers for Disease Control and Prevention attributes the decline partly, though, to people avoiding emergency rooms during the pandemic.

The Journal of the American Medical Association found that alcohol is consumed one more day per month by three out of four adults since the pandemic. One in 5 women reported an extra day of heavy drinking in a month.

Liquor-store owners said they are looking forward to a return to normal business levels, but many expect 2021 to be just as frothy.

"Even as bars open up and a semblance of order returns, it will take a while for people to get comfortable returning to bars and restaurants," Kaspszak said.

Bottle-shop owners remain unsure of what to expect for New Year's Eve celebrations. Typically, December rings in as the busiest month of the year. But with health officials warning against parties and extended family gatherings, some expect the year to finish with a whimper.

"Traditionally, we see a spike between Christmas and New Year's, but I'm staying on the fence this year," said Farrell of Haskell's.

"I'm not sure if people will be celebrating the end of 2020 with more bubbly or not, but Winston Churchill said of Champagne: 'In success you deserve it and in defeat, you need it.' "

Greenagel knows there won't be big parties, but he's still stocking up for a sales bump.

"Everyone wants to send 2020 out with a bang," he said. "We're bracing for bubbles at the end of the year."