Municipal Liquor Stores Feeling The Total Wine Squeeze

EDINA, Minn. (WCCO) -- It's called the Total Wine effect.

In the 19 months since the discount liquor store chain opened four metro area locations, many local liquor stores have reported a drop in business.

The stakes are especially high for cities with municipal liquor stores, the profits of which cities count on to balance their budgets.

Edina municipal liquor stores have lost so much business the city may have to raise property taxes by 7 percent.

That would amount to a $71-a-year tax increase on the average Edina home.

And while that may not sound like much, this is about much more than Edina.

In 2013, the city of Edina received $1.4 million in profits from its three municipal liquor stores. So far in 2015, there has only been $366,000 in profits.

The city projects by the end of the year that figure will increase to $800,000.

"The newest factor in our market is a large new discount competitor, and we have seen a significant impact from that competitor. It's Total Wine," Edina City Manager Scott Neal said.

In a statement, Total Wine & More Vice President Ed Cooper said the city is really blaming its residents.

"When Edina blames Total Wine & More for falling profits at its municipal liquor stores, the city is really blaming Edina residents and other consumers who are not spending enough money at its government-owned stores," Cooper said.

Neal, however, says the city isn't pointing fingers.

"We're not blaming anyone," he said. "We're trying to diagnose a significant decrease in our sales."

And it's not just Edina that has seen a decrease in municipal liquor sales.

Over in St. Anthony Village, two municipal liquor stores are less than four miles from the Roseville Total Wine & More.

In 2013, St. Anthony's two stores had $492,000 in profits. The 2015 projection is just over$ 171,000.

St. Anthony is fighting to get customers back.

"We really try to get the message out that 100 percent of our profits go back to the community," said Mike Larson, the manager of the St. Anthony Village stores.

To help bring in consumers, St. Anthony Village has increased offerings of Minnesota-made beers and spirits. The stores are also taking advantage of a unique quirk in Minnesota liquor laws, which allow them to sell brands widely considered to be exclusive to Total Wine.

"St. Anthony is experiencing customers coming back to our operation, the shiny new toy has worn off a bit," Larson said.

The Total Wine executive, however, said he does not think the shine has worn off.

Cooper said the Woodberry and Roseville stores are in the top 10 of Total Wine's 130 stores nationwide, and Bloomington and Burnsville locations are not far behind.

Two weeks from Thursday, Total Wine is opening a Maple Grove store.