Small, independent liquor stores have seen a sea change to the laws guiding their business since 2016, and the new rules of the game do not appear to be in their favor.
You would expect liquor store owners to be upset about the latest change that allows restaurants to sell beer, wine and cocktails in enclosed containers with delivery and takeout meals through July 31.
Instead, the owners of three Durango liquor stores said the law, adopted in June 2020 by the Colorado General Assembly to help restaurants cope with lost business from the COVID-19 pandemic, is good for restaurants and hasn’t cut into their bottom lines.
“I’m fine with it,” said Sherry Wertz, owner of Liquor World. “Mainly because we’re talking about helping out small ma-and-pa businesses. Here, in Durango, we’re not talking about the corporate world. We’re talking about helping the small guys.”
A bill has been introduced in the 2021 General Assembly that would make permanent the ability of restaurants to sell and deliver alcoholic beverages with delivery and takeout meals.
Sharon Gill, owner of Mac’s Liquor Store, said law changes enacted beginning in 2016, when grocery chains were allowed to begin selling full-strength beer, and continuing through the 2020 pandemic law have been the biggest liquor law upheavals she witnessed in 42 years owning the store.
“It hasn’t affected our bottom line one way or the other,” she said. “Really, it’s not that large of a segment,” she said of consumers ordering alcoholic drinks with their meals.
A healthy business niche still exists for liquor stores serving people looking to stock their wine racks, their bars and their summer ice chests. People know the most affordable option is still located at liquor stores, she said.
Mac’s Liquor store manager Robert Payton said helping restaurants helps liquor stores, too.
“A good number of our customers work in restaurants. If they’re not making money because they’re closed down, we’re not making money,” he said.
Mike Rich, owner of Wagon Wheel Liquors, said, “It hasn’t hurt our business. I’m happy with anything I can do to help small businesses get through this. People in general aren’t going to go to a restaurant to buy a bottle of wine or a bottle of liquor.”
Wagon Wheel has seen an upswing during the pandemic as more people experiment with their own cocktails after public health measures forced the closure of bars and restaurants.
“People are on the web. They figured out they can make these things themselves,” he said. “There’s new recipes coming out all the time, and the information is right at their fingertips.”
The internet has also sped the time drinks fall in and out of favor, and that’s kept liquor stores on their toes trying to prepare for the next big cocktail, its popularity fueled by social media chatter.
All three liquor store owners said they’ve weathered the first change in the industry – competition from grocery stores for full-strength beer sales – and it mainly caused just a temporary bump in the road.
Payton oversees the beer selection at Mac’s, and a big part of his hiring stemmed from his knowledge of crafts beers, Gill said.
“We’ve expanded our selection,” she said. “Robert can order beers, and we’re selling them before they get off the truck.”
Rich said the rising popularity of craft beers protects liquor stores, which can offer a broader selection, and more knowledgeable employees.
“We have better selection and service. Our employees are 21 and over,” he said. “They can discuss beer with the customers. If you’re having a pork roast tonight or a Mexican dinner, they can make a recommendation. In a grocery store, the employees will point you to the beer aisle.”
One aspect of the 2016 law that has had greater impact on the Front Range than in La Plata County is liberalizing the number of stores chains and independents can operate.
On the Front Range, grocery chains and chain liquor stores have been buying out independent liquor store licenses of any operator within 1,500 feet of their site so they can open, own and operate additional full-service liquor stores. Purchasing the licenses of nearby stores is a requirement of the 2016 law to allow multiple ownership for large chains.
Under the law, chain grocery stores can currently own up to five full-service liquor licenses, and that number goes up to eight in 2022. In 2027, chains can own 20 full-service liquor licenses and in 2037, all limits go away.
Also under the 2016 law, small independent liquor stores can now operate two stores, that increases to three stores in 2022 and four stores in 2027.
“If south City Market wanted to operate a full service liquor store, they’d have to buy me out,” Rich said. “If Albertsons wanted to operate one, they’d have to buy out Liquor World. If north City Market wanted to operate one, they’d have to buy out Mac’s.”
The buyouts are happening on the Front Range, but not in rural parts of the state, Rich said.
The limits on the number of licenses, at least through 2037, has kept chains focused on the Front Range.
“They aren’t going to be coming here,” Rich said. “People fish where the fish are. Why would you come here when you have hundreds of bigger markets to choose from?”