Some ABC stores still struggling, despite new liquor law
Posted December 8, 2011
Raleigh, N.C. — North Carolina makes about $275 million in liquor sales each year, which benefits the state's General Fund and the cities and counties where alcohol sales are allowed. However, some Alcoholic Beverage Control stores lose money each year, despite a new liquor law that is supposed to help struggling stores.
At least 23 ABC stores lost money last year. The Maxton store in Robeson County is a poster child for operating in the negative. It has turned a profit once in the past decade, and the state stopped shipping liquor earlier this year when the store couldn't pay its bills.
Maxton isn't alone with its chronic problems.
“There are some that, if you go back and look, they’ve had challenges. This is not their first year,” said Agnes Stevens, spokeswoman for the state ABC Commission.
The new law makes it easier for the state to close a store. Stores have to meet goals, workers have to go through training and bills have to be paid.
“It requires that they be balanced,” Stevens said.
Local ABC boards run the stores, and 50 percent of the approximately 165 active boards did 91 percent of the sales, according to Stevens, which means the other half did 9 percent of the sales. The boards that were unprofitable represented 2 percent of total sales.
Stores need time to get on track, so none are shutting down just yet, according to Stevens. Some of the failing stores are brand new.
“Others that don’t fit in that situation are rural boards, and those may have economic challenges,” Stevens said.
The bottom line for stores, which plow a certain percentage of sales back into the community, isn't always the last word.
In Newton Grove, a town with 600 residents, the ABC store operates on the bubble. Local say that, even in a down year, the store still puts money into the local economy.
“Last year, we received $5,000. It’s been as high as $10,000,” said Newton Grove Mayor Gerald Darden, noting that closing the store would just send those dollars down the road.
“In a small town, we have a small budget, and things are tight and it helps us out,” Darden said.
If the community wants the store, the local board can keep it open as long as the bills are paid. Some stores aren't able to give any extra money back to the community.
The Newton Grove store is trying to improve its bottom line and has made some changes, including allowing customers to get their own liquor, instead of coming to the counter and having the clerk get it for them. Sales are up 5 percent from July when the change was made. That's at least one bottom line that the state can say is already showing improvement.
There was talk last year of privatizing liquor sales after a study showed the state could make more money. However, Gov. Bev Perdue and lawmakers decided not to address that issue at that time. The State ABC Commission is in the middle of doing performance audits, and some are already posted online.