Convenience at what cost?
Arecent survey by WalletHub listed Connecticut as the second-worst state to start a business, which may come as no surprise. So, why would we want to harm the businesses that we have? That is exactly what will happen if the sale of wine in grocery stores becomes a reality in Connecticut.
Wine is currently only sold in the 1,250 package stores across the state. They employ over 15,000 people in stable jobs that support many families and help sustain a healthy, local economy. Many of these stores are family-owned, with some in their fourth generation of family ownership. They may be a husband-and-wife team, who invested their life’s savings to open a store in their community. They may be immigrants who came to this country in search of a better life for themselves and their children. They are small business owners, looking to make a decent living in our state, and to provide for their families.
Package stores are often the last stable small business in their respective towns, giving back to their communities through fundraisers and sponsorships for local charities. They are generous supporters of local events, and part of the fabric of their communities — because they live and work there. In many small towns, they are the last business left on Main Street. But allowing the sale of wine in grocery stores will change all of that.
Most people don’t realize that package stores are restricted by law in what they can sell. They can basically sell three things: spirits, beer, and wine (C.G.S. 30-20). If it’s not listed in statute, they can’t sell it. By contrast, grocery stores can sell tens of thousands of items — and they do.
Of the enormous number of items that grocery stores sell, many of them are not even grocery related. They have flower shops, pharmacies, and banks. They sell seasonal items such as beach chairs, snow shovels and holiday decorations. Selling wine will be another profit margin for these large, corporate entities at the expense of the small package stores. Grocery stores have many avenues to increase their profits, but they seek to change the law to allow them to sell wine because they see it as another profitable product. Remember what happened to the small bookstores, independent pharmacies, hardware stores and other businesses when large conglomerates came in.
Of the three primary products sold by package stores, wine yields the highest profit margin, and it’s what keeps package stores in business. It pays the labor costs, insurance, mortgage, rent, taxes, electricity, and other business costs. Wine accounts for 30 to 60 percent of overall sales of a package store, depending on the store’s business model. A reduction in wine sales of any sizable amount is going to cause serious financial problems for a package store.
Alcohol sales are finite, and the rate of alcohol consumption is relatively flat. No one will be drinking more wine because it’s sold in more locations. Sales of wine in grocery stores will displace wine sales in package stores — period, despite any economic study to the contrary. It will also cause a significant loss in ancillary sales that would have occurred had those wine purchases been made in a package store. You can’t sell a customer a product if they don’t walk in your door.
They say customers want convenience. Package stores are one of the most convenient businesses in the state, with 1,250 package stores located in 162 of 169 towns. They are open 92 hours, seven days a week. Customers can place orders and pick them up at curbside or have them delivered to their home. That seems like adequate convenience for obtaining an age-restricted, regulated substance.
Reducing the conversation of wine sales in grocery stores to “convenience” is disingenuous. Overnight, it would allow over 850 grocery beer permit outlets to sell wine, representing a 68 percent increase in the venues that can sell the most profitable product in a package store. This is a game changer that will completely upend business plans and drive many package stores out of business.
Once upon a time, we cared about small businesses in Connecticut — Is this still the case?