Perham liquor store has brought $4.68 million to city coffers since 1995
Liquor store profits reduce the cost of city services, support programing and more.
PERHAM — The Perham Municipal Liquor Store, Landmark Liquors, has injected about $4.68 million into city coffers, according to the Minnesota Secretary of State Liquor Store Operations reports which date back to 1995.
Without the liquor store transfer to the city, the "2023 tax rate would be approximately 60.5%, up from 50.7%, so roughly 10% higher, without the liquor store contribution" for the city to maintain its current city services and budget obligations, said Perham City Administrator Jonathan Smith.
In addition to reducing the tax burden on city residents, liquor store transfers are used for other purposes.
“Liquor store funds have helped several projects either directly or indirectly within the community,” said Smith.
He explained the funds offset large capital purchases, reduce the cost of city services, (such as fire, streets and police) and support programming and operations at the library, the Pioneer Grounds, the Perham Area Community Center, city golf course and more.
Transfers provide steady stream of funds into coffers
Since 1995, Landmark Liquors has consistently funneled money into the city’s general fund. The report started with $27,000 being transferred in 1995, which was the least amount in the state's documented history. The following year, the amount increased to $52,000, which it remained at for three consecutive years. Then, a steadily increasing trend began.
By 2002 the store transferred $132,000 into the general coffers. The amount of the annual transfer has not dipped below $100,000 since. By 2015, the average amount transferred increased to $303,250 and has not dipped below $175,000 to date.
The most recent transfer was for 2022 and Smith reported the amount totaled $314,050. While that is impressive, the store saw its largest amount transferred in 2008, which totaled $692,216.
In 2008, the liquor store was moved from the lower level of Perham City Hall to a larger, newly-built building that is visible from Highway 10. Smith said the cost for the new store was “just shy of $1 million,” and the store is paid off.
“At this point, there are no major plans for renovations or additions,” Smith said. “Maintaining what we have and continuing to merchandise and stock the store appropriately.”
Sales have grown more than sixfold since 1995
In 1995, the store reported sales of almost $730,000. By 1999 the store surpassed its first $1 million in sales. The increasing sales trend continued, hitting $2 million in 2008. By 2014, sales reached $3 million and in 2020 they peaked at $4.43 million. The following year, sales dipped modestly to $4.39 million. Smith said the 2022 sales held steady with a total of $4.41 million.
The Secretary of State report revealed that when it comes to gross sales, Landmark Liquors is 31st out of 177 municipal stores in the state.
The top honors went to Lakeville, which has a population of about 72,000, followed by Edina and Richfield to fill out the top three.
Regionally, the leader in gross sales were:
7. Detroit Lakes
41. Park Rapids
107. New York Mills
167. Wolf Lake
Developing a loyal customer base is key
While sales at the liquor store have increased, that doesn’t always mean there will be profits. Some stores struggle to maintain a balance between profit and the cost of buying products and other operating costs — such as utilities, building maintenance, and employee wages.
Finding a balance is needed to unlock profitability, and the Perham liquor store appears to have cut a good key.
Landmark Liquors Manager Bob Dreger reported the store has three full-time employees (who receive benefits) and about 14 part-time employees. He explained loyal customers were built through dedicated, helpful and friendly staff, a neat and clean store, competitive prices and a centralized location.
Dreger said during the COVID-19 pandemic there were many product shortages, however, they were able to find a similar product to keep customers satisfied. Knowing the customer base is important, as is ensuring the top sellers are plentiful.
“For our store, Busch Light 30 pack is number one,” Dreger said. “Number two is not even close (to the number one sales numbers).”
Dreger noted the store works hard to impress its customers, and takes pride in the fact the profits go back to the community.
“It’s important for people to realize the money they spend at Landmark Liquors stays in the community,” Dreger said.
Liquor store is a proven moneymaker for the city
As the adage goes, it takes money to make money. And, once the operating costs are taken care of, the net profit remains. According to the Secretary of State reports, Landmark Liquors has been a consistent moneymaker. Dating back to 1995 the store has not seen a single year without a net profit.
As a baseline, the store saw a $60,580 net profit in 1995. By 1998 the net profit grew to about $104,000. Then it took the store almost 10 years to double its net income and hit the $200,000 benchmark.
The liquor store surpassed a $300,000 net profit in 2012, and followed it up two years later by cruising past the $400,000 net profit benchmark. Then, it took four years to reach the $500,000 net profit milestone. In 2020, the store saw more than $600,000 in net profit for the first time.
It should be noted in the years between reaching new net profit heights the store’s net profit bounced mildly from year to year. That means just because the store hit a benchmark in net profit one year, it may have fallen below that earmark the following year.