The COVID-19 pandemic provided quite the boost in delivery sales for Edina's three municipal liquor stores, setting it up for the future.
Last year, Edina Liquor did $2 million in sales via its home delivery service. That's nearly 30 times the amount it did in 2019, when sales through home delivery totaled $70,000.
The city had launched its delivery service in 2019, and it was becoming increasingly more popular in the months leading up to the pandemic. In January 2020, Edina Liquor was processing 12-15 orders per day and in early March, before the state's lockdown, it was getting 35-50 orders per day, Edina Liquor General Manager Josh Furbish told Bring Me The News.
When the city closed its liquor stores to in-person shoppers for seven weeks starting on March 18, online delivery orders spiked to 200-plus per day, peaking at 465 orders on one day, Furbish said.
Retail operations started slowly reopening in mid-May but Edina Liquor didn't offer full operating hours until the end of August.
"As we began reopening the retail stores, our delivery order volume dropped but nowhere near the rate that it increased at that start, and once we were back to standard operating hours it accounted for 10% or more of our revenue every month," Furbish said.
And people's interest in home delivery has continued into 2021.
"We continue to see delivery as our primary growth engine for our enterprise and certainly the future of our operation," Furbish said. "Delivery revenue represented just under 10% of our revenue in Q1 [January, February and March] and we continue to add new delivery customers daily."
Furbish said though the pandemic "accelerated" the city's liquor delivery service, he credits Edina Liquor's "competitive service," which includes no delivery or administration fees and surcharges on orders, and has an order minimum of just $35.
"Since we operate 100% in-house from end to end, we can get your order to your doorstep quickly and accurately with most orders being fulfilled in less than two hours," Furbish noted, adding Edina Liquor's delivery area isn't limited to Edina — it includes zip codes in Hopkins, St. Louis Park and Minneapolis.
Although delivery sales increased significantly last year, it didn't lead to an increase in overall sales for 2020. Furbish said this was primarily due to the fact in-person shopping was closed or limited for much of the year.
According to the city's quarterly financial report released in late September, liquor store revenues were down $1.3 million for Q3 (July, August and September), with the report citing store closures in Q2 (April, May and June) as the primary driver. Sales during that time were down $1.2 million compared to 2019.
From September through the end of 2020, Edina Liquor saw a 9.4% increase in revenue ($450,000) thanks to delivery, which was up 1,000% from October-December 2020 compared to 2019 ($480,000 compared to $30,000), Furbish said. Meanwhile, revenue from in-store purchases was relatively flat compared to the same time in 2019 (the stores saw a 1% decline).
In 2019, Edina's liquor store sales topped $13 million in gross sales, the second-most of any municipal liquor store, behind Lakeville, which saw more than $16.2 million in sales, according to the 2019 Analysis of Minnesota Municipal Liquor Stores.
Bring Me The News has asked the City of Edina what Edina Liquor's total revenue was for 2020.
Setting up for the future
While Edina Liquor may not have made more money in 2020, the growth of its delivery service put them well ahead.
"The growth rate over the past year launched us almost five years into the future so a lot of things we had road mapped went from 'someday' to 'we need this tomorrow,'" Furbish said.
The city has no plans to stand still, with Furbish noting they're working on ways to continue advancing delivery service.
"We are working toward launching scheduling and routing software to enhance our customer experience and operating efficiencies as well as developing a branded application. There are a few third-party services out there that do a great job with alcohol delivery. We believe the customer experience and expectations are our responsibility to manage and maintain which is why we chose to build our service in-house and compete in this market."
Like other municipalities with liquor stores, Edina uses liquor store profits to relieve taxpayer expenses and provide services and recreational activities. In Edina, that includes contributing to Braemar Arena, the Edina Art Center and the city's construction and general funds.
Municipal liquor stores
Edina is one of 18 cities within the seven-county metro area that operate municipal liquor stores (in all of Minnesota, 182 cities operate 215 municipal liquor stores).
And it's not the only one offering delivery in the west metro. Furbish noted Eden Prairie is "actively working" on launching an eCommerce and delivery service at its three city-run liquor stores, while the city-owned Wayzata Wine and Spirits also offers delivery but it's not fully integrated with eCommerce services yet.
"We hope to see more municipal liquor operations explore this avenue and we are more than willing to help support and plan should they choose to," Furbish said.
As reports show people drank more in 2020 amid the COVID-19 pandemic, it's unclear how all the state's municipal liquor stores fared in 2020 compared to the year prior. The Minnesota Office of the State Auditor, which analyzes municipal liquor store operations, will not release the data for last year until the end of 2021.
However, at least one municipal liquor store did see an overall boost in sales from the pandemic. According to the City of Wayzata's 2020 annual report, the city-run liquor store reported the "largest total revenue in history" of the store, with a 13% overall increase in sales. Sales topped $3.4 million in 2020, compared to $2.97 in 2019. (Wayzata ranked No. 10 in terms of gross sales of all the state's municipal liquor stores in 2019.)
In 2019, municipal liquor stores reported $372.1 million in sales, an increase of 3.3% ($11.9 million) over 2018, the state auditor announced in December 2020.