{"id":49210,"date":"2021-01-19T20:25:34","date_gmt":"2021-01-20T03:25:34","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/small-liquor-stores-brace-for-more-changes-in-alcohol-laws\/"},"modified":"2026-03-31T03:46:27","modified_gmt":"2026-03-31T09:46:27","slug":"small-liquor-stores-brace-for-more-changes-in-alcohol-laws","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/small-liquor-stores-brace-for-more-changes-in-alcohol-laws\/","title":{"rendered":"Small liquor stores brace for more changes in alcohol laws"},"content":{"rendered":"\n

\"Jim
Jim Archibald, left, owner of Morgans Liquor in Denver, helps a customer pick beer from one of the coolers on Jan. 11. Archibald says the sale of full-strength beer in grocery stores has impacted his business, especially since he shares a parking lot with a Safeway store.<\/span>Kathryn Scott\/Special to The Colorado Sun<\/span><\/figcaption><\/figure>\n<\/p>

Days into the new year, the owner of Morgans Liquor in Denver sat down with his financial books. The pandemic gave him a small boost in 2020 sales, but a troubling slide continued: His customer count continued to decline.<\/p>\n

\u201cMy dollars were up, the rings (on the register) were bigger, but my customers were still trending down,\u201d owner Jim Archibald said. He added: \u201cI\u2019ve been on a big downward trend ever since January 2018.\u201d<\/p>\n

In his mind, the trajectory is easy to explain: A pair of laws that took effect in the past five years that expanded sales of full-strength beer to grocery stores and allowed bigger liquor retailers to dominate a market once reserved for mom and pop owners.<\/p>\n

No relief is in sight. The liberalization of alcohol regulations prompted by the pandemic \u2013 such as delivery and to-go cocktails \u2013 may become permanent if new legislation is approved, and existing laws will allow some retailers to add even more affiliated liquor stores starting in 2022.<\/p>\n

\u201cI had this dream of passing my store on to my kids because it\u2019s provided our good living,\u201d Archibald said. \u201cI love my job, but I would never encourage anybody to get into the retail side any more because the big box stores and the chains and the grocery stores are taking it over.\u201d<\/p>\n

The new laws \u2013 one approved in 2016 to expand who can hold liquor licenses and another in 2018 to expand beer sales at grocery stores, gas stations and big-box retailers \u2013 represented the most significant changes to the state\u2019s alcohol laws since Prohibition.<\/p>\n

The shift in the retail landscape created distinct winners and losers, a reality the governor and lawmakers noted at the time of the legislation\u2019s passage, and now sets the table for more potential changes in the 2021 legislative session.<\/p>\n

\u201cI don\u2019t worry about 2022, I worry about next month and the month after that, and who\u2019s going to open the next store. It\u2019s just a matter of time,\u201d Archibald said. \u201cThe ink on that (new law) is barely starting to dry and they are changing it.\u201d<\/p>\n

At least two major liquor bills are expected at the state Capitol when lawmakers return for the session in February.<\/p>\n

One is directly related to the coronavirus pandemic. When public health restrictions shut down or curtailed capacity at restaurants and bars last summer, lawmakers approved legislation to relax the law and allow them to sell and deliver alcoholic beverages, such as mixed drinks, wine bottles and growlers of beer.<\/p>\n

The law expires July 1, but its sponsor, state Sen. Jeff Bridges, said he plans to introduce legislation to keep the new system. Liquor store owners and other retailers worry it will cut into their business.<\/p>\n

\u201cWe know the economic recovery for restaurants and taverns is going to be years \u2026 and we want to make sure they have all the tools that they need to restore Colorado\u2019s food and beverage scene,\u201d Bridges explained.<\/p>\n

The Greenwood Village Democrat also plans to reintroduce legislation that failed in the 2020 session to allow liquor stores to add more locations.<\/p>\n

The legislation is controversial because it reopened the much-disputed compromise that led to the changes five years ago.<\/p>\n

Bridges sees it as leveling the playing field and allowing liquor chains to compete with bigger national chain retailers.<\/p>\n

\u201cThe idea is parity,\u201d Bridges said. \u201cFor those that want to compete, we should let them compete.\u201d<\/p>\n

Liquor stores look to expand, or just hold ground<\/div>\n

One of those that wants to expand is Applejack Wine and Spirits, which started in 1961. CEO Jim Shpall said the law has \u201can enormous impact on us in a negative sense that we are still addressing to this day.\u201d The pandemic kept liquor sales afloat, but he said \u201cthere are no winners in a pandemic.\u201d<\/p>\n

Applejack added a second location in 2020 and Shpall said he needs to keep expanding to compete. The law permits two more locations in 2022 for a total of four, but grocery stores and other retailers, like Walmart, can add three more for a total of eight, he said.<\/p>\n

\u201cIf we don\u2019t grow we definitely fail,\u201d he said.<\/p>\n

The smaller liquor stores like Morgans may not be able to grow. The association that represents these retailers is eyeing the expected legislation warily. \u201cEverybody wants to fiddle with the grand compromise,\u201d said Jeanne McEvoy, the former director of the Colorado Licensed Beverage Association, which represents independent liquor store owners.<\/p>\n

\"Morgans
Morgans Liquor, at 1200 E. Evans Ave. in Denver, is facing increasing competition from the Safeway in the same parking lot and a Total Wine and More a couple miles away.<\/span>Kathryn Scott\/Special to The Colorado Sun<\/span><\/figcaption><\/figure>\n<\/p>

Morgans Liquor, locally owned and operated in Denver since 1931, is uniquely positioned to feel the full pinch of the new competition.<\/p>\n

In 2018, Total Wine and More, a large liquor retailer, opened its first Colorado store just 2 miles to the east down Evans Avenue. The Maryland-based company\u2019s executives said the store was a result of the passage of Senate Bill 197 in 2016 that allows retailers to operate multiple stores.<\/p>\n

And Archibald\u2019s store shares a parking lot with a Safeway grocery store that began selling beer at midnight on Jan. 1, 2019.<\/p>\n

His business dropped as soon as Total Wine opened. And Archibald attributes a 15% loss in sales to Safeway\u2019s ability to sell beer in 2019. The major beverage makers offer exclusive discount prices to big-box liquor stores and national grocery chains that he can\u2019t match. Even though the lockdowns from the pandemic meant higher sales as more people were drinking at home, 2020 can\u2019t erase the overall downward trend he\u2019s seeing.<\/p>\n

In 2021, \u201cI\u2019ll continue the downward trend,\u201d he predicted. \u201cI\u2019m just wondering where the bottom is going to be. \u2026 I think the mom and pop store is going to be gone in the next 10 years.\u201d<\/p>\n

For craft brewers, new marketplace also fuels disparities<\/div>\n

The disparate effects of the new laws on retailers are akin to what craft brewers in Colorado are experiencing in the marketplace.<\/p>\n

In 2019, the first year of full-strength beer being stocked by retailers previously selling 3.2 beer, most of the state\u2019s 400-some breweries didn\u2019t expand their sales to these new locations, according to a study by Colorado State University. A quarter of craft brewers sold in grocery stores in 2019 \u2013 a 5% increase from the prior year \u2013 and only a few in convenience stores. Both spaces are dominated by national brands, in particular those from mega-brewers like Anheuser-Busch, which brews north of Fort Collins.<\/p>\n

The ones that benefited the most were regional breweries \u2013 such as New Belgium, Oskar Blues and Great Divide \u2013 that saw sales volume jump to nearly 20% in grocery stores.<\/p>\n

The smaller breweries had trouble accessing the new marketplace for a variety of reasons. Some didn\u2019t make enough beer to keep the shelves stocked. Others didn\u2019t have contracts with distributors the grocers favored. And still others found that grocery store customers preferred major big brands with the massive marketing budgets necessary to drive awareness.<\/p>\n

\"The
The cold cases at Morgans Liquor in Denver. Jim Archibald has been the owner of Morgans Liquor for 20 years.<\/span>Kathryn Scott\/The Colorado Sun<\/span><\/figcaption><\/figure>\n<\/p>

\u201cWe did find that all (craft) brewers did report substantial barriers to entry,\u201d Nathan Palardy, a CSU research and study author, said at a recent virtual craft brewers conference.<\/p>\n

How it materializes in 2020 or into the future remains uncertain. Shawnee Adelson, the executive director of the Colorado Brewers Guild, which represents craft brewers, said some retailers, like Whole Foods, are prioritizing independent local brands.<\/p>\n

\u201cRegional-sized craft breweries were definitely in the best position to take advantage of full-strength beer in grocery stores, and I would imagine as the market matures that may change,\u201d she said.<\/p>\n

The craft brewing industry still sees liquor stores as the place to sell the most exclusive beers and unique styles because it offers more one-on-one sales opportunities, she said.<\/p>\n

The study offered a glimpse of the sales shift from liquor stores to grocery aisles. For just the craft beer market \u2013 and not brands like Budweiser or Coors \u2013 10% of sales volume shifted to grocery from liquor stores.<\/p>\n

It may seem like a small change, but McEvoy at the association that represents liquor stores explained that beer sales are what keeps liquor stores open. \u201cBeer is what we call the bread-and-butter product,\u201d she said. \u201cIt turns over very quickly, it gets out the door pretty quickly. It is the cash cow that enables liquor stores to invest in more employees and more products.\u201d<\/p>\n

For grocery stores like Safeway, it\u2019s just a matter of meeting customer demand for convenience, said Kris Staaf, a Colorado spokesperson for the grocery store chain. This proved particularly true during the initial coronavirus lockdowns, and she said she hoped beer sales helped keep local breweries afloat in the tough time.<\/p>\n

Even though she can\u2019t cite sales numbers for competitive reasons, Staaf said the change \u201cwas very, very well received by customers, as we knew it would be.\u201d<\/p>\n

The Colorado Sun is a reader-supported, nonpartisan news organization dedicated to covering Colorado issues. To learn more, go to coloradosun.com<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Impacts from liberalizing laws five years ago still being felt<\/p>\n","protected":false},"author":1,"featured_media":49211,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[],"tags":[924,233,28],"naviga_topic":[],"class_list":["post-49210","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-alcohol","tag-coloradosun-com","tag-headlines"],"acf":[],"author_name":"dh_admin","_links":{"self":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/49210","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/comments?post=49210"}],"version-history":[{"count":1,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/49210\/revisions"}],"predecessor-version":[{"id":87539,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/49210\/revisions\/87539"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media\/49211"}],"wp:attachment":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media?parent=49210"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/categories?post=49210"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/tags?post=49210"},{"taxonomy":"naviga_topic","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/naviga_topic?post=49210"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}