Tri-City state liquor stores sales jump

Consumers may have cut their spending in this recession, but they're still buying booze from state liquor stores.

Last month, Benton County had gross sales of almost $1.6 million, up 10 percent from October 2008, and Franklin County had gross sales of more than $444,000, up 14 percent in the same period.

Statewide, total gross sales amounted to more than $75 million, up about $1.28 million or 1.74 percent from October 2008.

Gross liquor sales in the state grew 106 percent from $399 million in 1997 to $825 million in 2008 and show no sign of slackening. The share of spirits is expected to grow to 3.8 percent in the 2010 fiscal year, officials said.

"We are on target," said Steve Burnell, marketing manager for the Washington State Liquor Control Board.

But it's not a case of people drowning their sorrows, he said.

"Our dollar growth continues to grow faster than our volume growth," Burnell said.

In December 2008, there was a record 13 percent volume growth with sales of more than 119,000 liters compared with the same month in 2007 at the five Benton County stores.

In contrast, last month's volume sale was about 78,000 liters with almost no improvement from the same period a year ago.

The higher dollar sales suggest that some consumers are buying expensive liquor.

"For them, it's an affordable luxury," Burnell said.

It's a myth that people tend to drink more when they are out of jobs or during a recession, said Gail Gleason Milgram, professor emerita at Rutgers University's Center of Alcohol Studies in New Jersey.

There's no apparent correlation between increased liquor sales and the recession, she said. "At least I haven't seen any empirical study of that," she said.

It also is possible people are buying more alcohol because they aren't going out to restaurants and bars as often as they did before to save money, she said.

Liquor sales go up during the holidays along with sales of cheese and meat as many people entertain at home, she said.

"Holidays are the busiest times for us," said Brian Smith, spokesman for the Washington State Liquor Control Board.

It's a time when consumers, restaurants, bars and clubs also stock up, he said.

Sales of whiskey, rum, vodka, gin, cocktail mixers, tequila, craft beers, wine and other alcoholic drinks at Tri-City liquor stores typically begin to increase in October and reach a peak in December before tapering off in January.

In 2008, Benton County's gross sales went up from about $1.44 million in October to about $1.5 million in November, and to almost $2.2 million in December. Sales dropped to a little over $1.32 million in January.

Franklin County's two stores saw a similar trend last year when sales went up from about $391,000 in October 2008 to about $415,000 in November 2008 and to more than $605,000 in December 2008. Sales dropped to about $331,000 in January.

Sometimes a price increase helps boost total liquor sales, Milgram said.

That's certainly the case in Washington where hard liquor prices increased on average about 6.5 percent in August. The increase is expected to generate about $80 million in the next two years, and help the state offset part of its $9 billion deficit.

In the last few years, wine sales have increased nationally, while hard liquor and beer sales have seen a decline, Milgram said. There's a perception that moderate wine drinking is good for health, she said.

Also, a rapid of growth of wineries, particularly in Washington, may have contributed to increased sales of wines, she said.

But state stores only have about 5 percent to 6 percent market share of the wine market, which is dominated by private distributors, said Burnell of the state Liquor Control Board.

"We have seen a moderate growth in demand for bourbon and Irish whiskey at the stores," he said.

The board has been trying to spruce up stores statewide and has opened liquor and wine holiday gift stores in four Western Washington shopping malls as part of a pilot project to generate 3.8 million in additional revenue during the 2009 and 2010 holiday seasons.

-- Pratik Joshi: 582-1541; pjoshi@tricityherald.com; Business Beat blog at www.tricityherald.com