The Free Press, Mankato, MN

April 2, 2013

Blue Earth, St. James among profitable municipal liquor stores

By Brian Ojanpa
Free Press Staff Writer

— The Blue Earth muni continues to be munificently profitable.

That city’s municipal liquor store again has turned an enviable profit, according to the annual state auditor’s report on Minnesota municipal liquor operations.

The most recent data available show the Blue Earth off-sale store in the 3,300-population town posted a $101,000 profit in 2011, up from $71,000 the previous year.

“And 2012 is going to be even better than that,” City Administrator Kathy Bailey said.

Like city officials in other towns where munis show profits, Bailey said the success is all about the store personnel.

“We have really great managers and staff. They know the people and the community. You can’t serve people unless you have good people doing the serving.”

Bailey said it also helps that the Blue Earth store is situated just off busy Interstate 90, and that staff creatively engage its customer base with offerings such as a wine club that has monthly in-store wine samplings. The store also has begun beer-tasting sessions.

Bailey said liquor store profits continue to benefit the town in ways including the 2012 construction of an $80,000 public picnic shelter.

The St. James municipal, the other top-performing area store, showed a $154,000 profit in the 4,600-resident town, up from $124,000 in 2010.

City Manager Joe McCabe said the store’s success is beholden to its management, staff training in customer service skills, and community awareness that the city-owned swimming pool and movie theater depend on store revenues.

Other area munis showing significant profits in 2011 included Le Center ($41,025) and Madelia ($22,757).

The Mapleton store, which had a 2010 profit of $22,811, had a 2011 income loss of $46,102.

Mapleton City Administrator Patty Woodruff said, other than some unforeseen expenses contributing to the drop in business, she doesn’t know why the falloff was so pronounced.

She said the store changed managers in 2012 and business appears to be on the upswing.

“Sales are definitely up, so that’s a positive, and we’re really tightening our budget for 2013.” 

Meanwhile, the Wells municipal continued to struggle in 2011, posting a $34,000 net loss following a $53,000 loss in 2010.

City officials have said the store has been beset by unforeseen capital improvement expenses such as roof repair and other infrastructure needs.

The city also had to transfer money out of its liquor fund to shore up city departments with budget shortfalls.

The auditor’s report said statewide in 2011 the combined net profit of all municipal liquor operations totaled $23.4 million, an increase of $1.7 million (8 percent) over 2010.

During 2011, the state’s munis transferred $20.1 million of their profits to other city funds. That represents a 20.8 percent increase over total net transfers made in 2010.

In 2011 Minnesota’s municipals reported a 16th consecutive year of record gross sales, totaling $317.2 million.

Thirty-six cities reported net losses for 2011, compared with 40 cities in 2010.

Minnesota municipalities were originally authorized to own and operate liquor establishments as a means of controlling sales of alcohol.

For many communities in rural Minnesota, municipal liquor operations provide access and convenience in areas that might be unable to attract privately-run ventures.