A deja vu in the world of alcohol sales: How freer wine sales will affect Colorado liquor stores

A new CSU study shows that expanded beer sales decreased monthly visits to Colorado liquor stores -- the same may happen with wine sales.
How beer and wine sales in larger stores are affecting liquor stores
Published: Mar. 16, 2023 at 9:39 AM MDT
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COLORADO SPRINGS, Colo. (KKTV) - Statewide alcohol liberalization is decreasing liquor store sales.

A new Colorado State University study shows that since Colorado grocery and convenience stores began selling full-strength four years ago, monthly visits to liquor stores across the state decreased around 5%.

Professors of the study predict visits will decrease around 10% with wine.

They say it all has to do with alcohol liberalization, or freer sales of beer and now also wine. But the more freedom with this, the less sales for some.

That ‘some’ is typically liquor stores, especially the smaller ones.

“What’s the prediction of the store that is going to close? The small store with limited space, very close to the grocery stores that historically was selling big brand products, those ones that are gonna have a hard time surviving,” said Marco Costanigro, a CSU professor in the Department of Agricultural and Resource Economics.

The big picture here is that liquor stores are going to lose even more customers, thus money, with wine entering the picture.

Costanigro says that with beer sales, liquor stores were already at risk but could get by. Now, many, particularly the smaller ones, could be at risk of closing down.

He also tells 11 News that when alcohol was sold separately from other products, such as your groceries, liquor stores benefited from being in close proximity to larger stores, as people could make a pit stop for drinks.

Now, the two no longer have a symbiotic relationship, Costanigro says.

He suggested three ways for liquor stores to continue competing, while acknowledging none of these are simple solutions.

  1. Offer more assortment, so customers have to buy their drinks at these smaller stores.
  2. Increase prices, according to the market.
  3. Move farther away from larger chain distributors (i.e. Safeway), so your customer base isn’t affected.

“And now grocery stores are becoming a biggest competitor,” Costanigro said. “I think you will start to see some some of the smaller liquor stores to close at this point.”

When it comes to the local breweries that sell their products to these larger stores, Costanigro says it’s all about the scale of operations. The larger the brewery, the more likely it can make, pack up and distribute drinks to more stores.

But since grocery and convenience stores have limited shelf space, there’s already high competition.

Interestingly, Costanigro says that geography played a role, especially with rural versus urban.

“We observed that it was mostly in the rural areas that you were seeing the higher declines in visits,” he explained. “If you go look at the map of the counties that voted in favor of [beer sales] liberalization, urban consumers voted more in favor... versus rural consumers were the ones that were opposed.”

He found, however, that those in rural areas took advantage of the one-stop shopping, likely due to distance. Rural areas tend to have greater travel time between buildings.

Costanigro also noted the difference in shopping experiences at a larger business versus liquor store. These smaller operations may offer more niche products, expertise and in-store assistance.

The professor clarified that while none of this means there’ll for sure be a mass closure of local liquor stores, it’s clear who the winners are with alcohol liberalization.

And at the end of the day, it all depends on you, the customer, and where you want to put your time and money. A main reason voters wanted this wider alcohol distribution, though, is for convenience.