Minnesota’s municipal liquor stores continue to make record sales.
According to a 2021 report from the Office of the State Auditor, 212 stores owned by 171 cities sold $423 million in product in 2021, up 3.2% from 2020. This is the 26th straight year of record sales.
Hutchinson came in at No. 12 out of 177 cities, with $7.3 million in sales. Litchfield was at No. 43 with $3 million. Glencoe was at No. 52 with $2.45 million. In comparison, the city with the most gross sales was Lakeville, with $19.7 million.
When accounting for net profit as a percentage of sales, Glencoe was No. 45 with 11.6%, Litchfield was No. 80 with 9% and Hutchinson was No. 98 with 8.1%.
“The most striking data point is the historic increase of on-sale operations profit and sales. After struggling during the closures of 2020, Minnesota’s on-sale liquor operations bounced back with a 105% increase in profits for 2021,” said State Auditor Julie Blaha. “In addition to strong profit growth, the number of unprofitable on-sale operations declined from 35 in 2020, to just seven in 2021.”
Most local municipal liquor stores are off-sale only, including Darwin, Dassel, Litchfield, Glencoe and Hutchinson, according to the state report. Silver Lake has both on- and off-sale.
In 2021, Minnesota’s municipal liquor stores had net transfers to cities of $23.1 million. This represents money added to city coffers, which could offset expenses. In Hutchinson, $550,000 was transferred to the city from Liquor Hutch, while $276,330 was transferred to Litchfield from Litchfield Municipal Liquor, and $250,000 was transferred to Glencoe from Glencoe wine and Spirits.
State law requires cities whose liquor operations show a net loss in at least two of the past three years to hold a public hearing to determine whether to continue liquor operations. Based on 2021 data, 20 cities were required to hold a hearing in 2022, compared to 24 in 2021. No nearby cities are in such a situation.
When speaking to the Hutchinson City Council about 2021 sales in early 2022, Liquor Hutch director of operations Candice Woods said 2021 sales were actually down 4.6% from the year before, though still quite high.
She said liquor, beer and wine sales decreased slightly due as compared to a 2020 COVID spike, but that didn’t mean the products were unpopular.
Liquor decreased the least (0.6%) and was the second most profitable item overall with $2.63 million in sales. Beer sales dropped 6.5% but still brought in $3.46 million. Wine sales decreased by the same rate as beer and brought in $1.06 million in sales.
Woods called liquor sales “stable,” as they did not drop much after the 2020 spike.
“We attribute that to the fact that people are staying home more,” she said. “Even though the bars and restaurants are open, still many of us are COVID sensitive and are choosing to stay home. The making of cocktails in your home continues to be a big trend.”
Products the liquor industry labels as “healthy” are growing in popularity, Woods reported in early 2022.
“They’re products with 4-5% alcohol, and products with no alcohol. We’re seeing a big thing right now in January where people are buying products that have had all the alcohol removed from the product,” she said. “That’s not a bad thing. It’s a good thing to see people being more responsible.”
