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Why one of the most popular arguments against Sunday liquor sales is bunk

It’s a perennial argument in the seemingly perennial campaign to end Minnesota’s ban on allowing liquor stores to sell booze on Sundays: that being open an extra day would not increase sales — it would just spread those sales out over seven days instead of six.

And if sales don’t rise, then liquor stores owners would be hurt from having to absorb the increase in staffing costs.

Or as the Minnesota Municipal Beverage Association puts it: “We recognize Sunday Sales would benefit some of our members. However, the majority of facilities would eventually be negatively impacted.” The issue is “about spreading six days of sales over seven days of expenses.”

The one problem with the argument: there’s little to no evidence that it’s true.

Perhaps the best test came a decade ago in Washington state. In need of additional revenue — a common motivator for ending Blue Laws — state legislators there looked to alcohol sales. But unsure if ending the state’s ban on Sunday sales would cost more than it produced, lawmakers in 2005 settled on a pilot project. Of the 161 state liquor stores, 20 would be opened on Sunday for five hours only. Private stores under contract to offer hard liquor in smaller towns and rural areas could also opt in.

The results: sales increased at the pilot stores, and state liquor revenues increased overall. In addition, sales figures for the pilot stores showed that not only were sales on Saturdays and Mondays not reduced when the store was open on Sunday, they actually increased. At the same time, the state Liquor Control Board found that sales at state liquor stores that were not part of the Sunday pilot program suffered no overall loss of business. 

A study of the sales figures would eventually conclude that being open on Sunday increased sales far in excess of the additional staffing costs. At the outset of the program, the Washington Liquor Control Board staff estimated that it would see increased sales worth $9.55 million in the first two years of Sunday sales, while increased staffing and store costs were estimated at $1.43 million. The actual increase in sales among those in the program over the first two years: $18.5 million.

At the time, Washington was one of few states that controlled both the wholesaling of distilled spirits and the retailing. Other than the small contract stores, hard liquor was sold only in state-owned stores by state employees. Beer and wine, however, was sold in grocery stores and specialty shops and was available to customers seven days a week. 

No statistics were gathered to measure whether Sunday beer and wine sales declined at stores near pilot program outlets. (One of the criteria for being chosen for the experiment was that the liquor store had to be near shopping centers in densely populated areas that had other stores open on Sunday.) But Jan Gee, president of the Washington Food Industry Association, said there were no complaints from store owners about loss of beer and wine sales to nearby liquor stores open on Sunday.

The impact of Sunday liquor sales was so clear that the Legislature expanded the program to a total of 49 stores in 2007, and to 58 in 2009.

Chart source: Washington State Liquor Control Board
Data was collected on the twenty stores to determine if Sunday openings adversely affected sales on Saturday and/or Monday. Comparisons between the first year of sales for the Sunday Sales Pilot Project and the prior year were done for Saturday, Monday, and the 3-day period Saturday-Sunday-Monday. Through the first 12 months of the project sales on Saturday increased 11.4 percent; Monday sales increased 2.2 percent; and when you include Sunday, the 3-day period increased 31.3 percent. This compares to 23.8% for non-Sunday stores during the 3-day period (an increase of 7.5%).

In 2011, a voter initiative in Washington — backed heavily by retail giant Costco — kicked the state out of retail liquor sales, at both the wholesale and retail levels. Now those same grocery stores that could sell beer and wine seven days a week sell distilled spirits during the same hours.

The state liquor control board, however, was given another job by state voters the following year: It now regulates the growth, production and retail sale of recreational marijuana.

So far this session, nine bills have been introduced before the Minnesota Legislature allowing some off-sale of alcohol. They range from simply ending the ban on Sunday sales to giving local governments the option of allowing stores to remain open on Sunday. Two bills would permit craft breweries to fill growlers for off-premises consumption on Sunday. And one would create a five-year pilot project by allowing Anoka, St. Louis and Winona counties to opt in to Sunday alcohol sales in liquor stores. 

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Comments (28)

SAles is not margin

This analysis is missing a key point - $9.55 million in additional sales doesn't mean $9.55 million to pay expenses. The cost of goods sold is probably 85% of that (more if the sales mix is beer heavy), leaving about (magically) $1.43 million in revenue to cover the additional $1.43 million in expenses.

Increased Sales

The $9.55 million was an estimate. The actual increase was $18.5 million.

True, but...

The actual sales increase was $18.5 million, not $9.55 million.

That said, the real reason to allow Sunday sales has nothing to do with the expenses point -- it has everything to do with the fact that government shouldn't be dictating that a business be open or closed on a particular day of the week.

Costs

You're already paying rent, electricity, property taxes, etc on Sunday but generating no sales from it. The only additional expense on Sundays is employees--a significant one, but likely not the margin.

My error

Yes, I worked off the wrong number. Apologies.

Cost of goods sold

Check out this P&L from Delano's liquor store. Year to date COGS is shown at 73% of revenue. If we use this as a threshold, the stores would have generated an addition $5MM in gross profit, plenty to cover the estimated $1.43MM in expenses.

http://www.delano.mn.us/2014_CityCouncil/Feb18/5A2_Att5_LSIncomeStatemen...

Revenue to state

increased as well. From report: "Gross sales of $15.1 million will return approximately &.5 million in revenue to the state, including $4.7 million in revenue to the General Fund."

So,...

is it more revenue to the almighty state of Minnesota that is leading the charge for Sunday sale of booze?

Better than giving

The revenue to WI, Iowa and the Dakotas

Why do we want to increase Liquor Sales?

From a public policy perspective, why do we want to increase liquor sales? Personally, it doesn't sound like a bad idea to have one day a week for people to sober up.

It's strange to see the government leading the charge to change the existing Sunday blue laws, when the liquor industry is just fine with being closed on Sundays.

I own a small business. I like to maximize my sales and profits. But I also value some time off. You need to have some balance in your life. It's not always all about the $$$s.

So, then...

... why not mandate all businesses to be closed on Sundays?

Or alternatively . . . .

mandate they be closed one day a week - but they can choose the day?

Absurd MN liquor laws need to be changed. Now.

1) There are many members of the liquor industry who absolutely aren't "just fine" with the existing "Blue Laws" - far from it. Not everyone kowtows to the MLBA and their paid stooges. Furthermore, the vast majority of consumers prefer the choice to buy off sale alcohol on the second busiest shopping day of the week for no other reason than plain convenience. Why is the government affording protection and special treatment to a specific industry?

2) Plenty of business owners would like some time off. Should it be the role of the government to regulate that? We had "blue laws" that affected virtually every retail business as recently as the 1960s in MN. Those days are long gone - as they should be.

3) The "sober up" argument is ludicrous. If the government wants to mandate a "sober up" day - something they have no business doing - why can we all buy hard liquor and wine at almost every bar, restaurant and saloon in MN on Sunday? Why can someone sit at a bar all day on Sunday and drink their fill but you can't even buy a 6 pack of real beer at your local convenience store? Ridiculous. It should be one way or the other. It's really not that complicated.

4) The "sober up" argument is also tremendously insulting, implying that those of us who might want to buy alcohol on Sunday somehow have a problem. Really? Last time I checked, alcohol was a legal product here in MN and the vast majority of people who use and consume it do so responsibly. Imagine a Sunday in the summer where the weather is unusually nice and you want to have an impromptu BBQ. You realize you don't have any beer or wine handy - are we really going to demonize people in this extremely common scenario as "problem drinkers?" People need to get off of their high horses. We tried prohibition before and look how that worked.

There's not a single valid argument against this ridiculous prohibition. Not one. There's a small but extremely vocal minority of business owners who pay massive amounts of money to lobbyists to have the government maintain the current anti-consumer status quo and that's the only reason consumers in MN are being so poorly served. Vast amounts of tax revenues are being lost - both due to decreased sales and sales lost to border states, all of whom allow Sunday retail liquor sales. These laws need to be changed - the sooner or better. Than we can work on getting wine in the grocery stores.

No one is forcing you to be open

If you want a day off, be closed one day a week. That's your choice. Currently liquor stores in Minnesota and car dealerships are the only two types of businesses that do not have that choice

Another missing point or two

I wrote about this subject back in 2011 when lobbyists were claiming a tax windfall would result from Sunday sales in Minnesota. My piece links to other posts as well as to sources, something this story neglects.

http://greatdivide.typepad.com/across_the_great_divide/2011/02/the-alcoh...

I looked at Colorado, a state with much more in common with Minnesota in terms of its liquor regulations, which was being touted by the lobbyists as a Sunday sales success story.

One key piece of information missing from the Washington study as reported here: What were national liquor sales trends during the periods in question?

It turns out that annual sales rise and fall in states for reasons unrelated to store hours. It's entirely possible such a fluctuation masked effects of the Sunday sales. One year does not a trend make.

But the study greased the skids for ending the government control of sales, which was no doubt the long-term goal of the industry. I haven't studied the Washington case, so Peter could be right. But I don't believe the comparison here is as valid as say, taking another look at Colorado.

Policy

Government was created to cater to we, the people, not we, the businesses. If you want to remain closed on Sunday, then by all means do so! But don't force all the other businesses to also closed just because you don't feel like being open.

As far as people sobering up on Sundays, your morality is not my concern and should not be imposed on me. You have no idea what someone else's work schedule is like and when they can fit friends and family into their social calendar. For most people, Saturday and Sunday are their only days off from work to run errands and hook up with those friends.

Not to mention that just because they have a beer or glass of wine, it doesn't mean they're going out and getting plowed and mowing down the neighborhood kids with their SUV. BY and large most people are responsible with their consumption. If they're not, then by all means arrest them. But don't use that as an excuse to punish all the people who have done nothing wrong.

Why?

Why should the customers (us) or our law makers be engaged in the analysis of margins, gross sales, profits, etc. Do we do that for grocery stores.

The purpose of the ban is to protect the small business owner from the large business owner at the expense of the convenience of the rest of us. Government should stay out of that fight.

If a liquor retailer wants to close on Sunday so be it, no one is stopping them.

Speaking as a teetotaler

Just as it seems odd for me to be forced, via taxes, to help one business build a large facility downtown while plenty of other businesses get no help from me at all, it seems odd to me that most businesses can be open for business on Sunday, if they so desire, except for this business (and a few others – auto dealerships, for example), required by law to be closed. It strikes me as a vestigial attempt to impose “the Sabbath” – a purely religious concept – on a society that is secular by law and tradition.

I’m not going to be a customer, so I don’t much care whether liquor stores are open or closed on Sunday or any other day. Small-government advocates ought to be on board with the sentiment that the government shouldn’t dictate when a business can be open. Unfortunately, many small-government advocates are small business people. You can’t have it both ways. Getting government out of the approval or disapproval of when a business can be open more or less subjects that business field to being open when customers want it open, which might well be on Sunday.If you want to open your liquor store on Sunday, you should do so. If not, don’t. Plenty of restaurants take a day off during the week and still prosper, while others are open every day, and also prosper. I don’t think there’s some sort of template that assures your business will make money if it’s open – or not – on a particular day.

RE: Speaking as a teetotaler

Well put! Exactly!

Freedom vs government control

The real issue is freedom vs government control. Should state government really be responsible for choosing what businesses remain open and when they are open? I think not since our Founding Fathers beloved in freedom and liberty.

STATE government is

STATE government is completely within its bounds to do so, it's the federal government that needs to stay away and shut up

Tell you what ...

Government can force businesses to be open 7 days a week when government offices are open 7 days a week.

Let the business owner decide when they'll be open or closed.

Not complicated

Nobody is forcing anyone to do anything! Nothing in these proposed new laws mandates that stores have to be open on Sundays. All that is being asked is the OPTION for businesses to decide whether or not they want to be open on Sunday. Every single business in MN with the exception of off-sale liquor stores and car dealers currently has that option. If a liquor store doesn't want to be open on Sunday they would still have that choice under any proposed law change.

Agreed

And agreed W/O additional comment!!!

RE: Tell you what...

What do you mean by "government"? The Governor? The Legislature? Every State employee? How about county and municipal employees? Well, some of them DO work seven days a week! All too often, observations like this one suggest that "government" is some kind of monolith, single-minded entity "out there" that somehow has nothing to do with everyone else. Government IS you, whether you like it or not. You voted for them - they work for you. Didn't vote for them? Well, then you live in a representative democracy where you have to live with the prospect of sometimes being governed by people who may not share your every opinion. And as for "government," keep in mind that the 99% of the people who make up "government" are not elected, but are ordinary workers doing their jobs. Maybe they work seven days a week, maybe they don't. But don't stick the decision to close liquor stores on them. That's an historical decision, to which many elements of our society are party, that's lingered too long.

Nicely stated, Ted.

I have no dog in this fight, although I do know a couple of people who own their own liquor stores and want no part of being open on Sunday. That said, if the ban is lifted, there would be no "option" to stay open. In a business with as little margin and as much competition as retail liquor, any owner that wants to stay in business would have to remain open. No business wants to turn away customers and once you set that precedent, it's just a matter of time before you're gone.
Lastly, I have to say that I'm really getting tired of people equating tyranny and the "heavy hand of government" to an an issue as benign as this. We're talking an extra day of selling booze here...hardly the pressing issue of our time.

I agree with the last sentence

If the owner wants to be open on a Sunday, let him or her open on Sunday.

Basing an argument on funny data

I'm not for or against Sunday liquor sales, but rarely do I see an article based off of worse data.

If all liquor stores were closed on Sunday except for mine, you betcha I'd have an increase in sales. I'd be the only store open!

I'm not sure who funded the study, but they got taken. To base the entire article on it means the reporter did not look into the issue. And to claim the data is accurate because other liquor stores did not complain? That's opinion, not data.