Expert: Tracy liquor store ‘needs to catch up with the times’
TRACY — The Tracy Municipal Liquor Store just needs to catch up with the times, said Paul Kaspszak, executive director of the Minnesota Municipal Beverage Association (MMBA) in Minneapolis.
In order to do that, Kaspszak has paired a mentor from the MMBA with the manager of the Tracy Municipal Liquor Store to implement his recommendations on inventory control, wine events, partner buying and proprietary products.
For the past two years, the Tracy Liquor Store has been showing a loss, said Interim City Administrator Tracy Shane Daniels.
“In 2016, there was a loss of $168,554.57,” he said. “In 2017 there was a loss of $30,462.70. But you can’t really compare them as they’re not exactly ‘apples to apples.’ The reason being, the liquor store went out of the on-sale business in October 2016.”
Kaspszak had been out to meet with the Tracy Liquor Store Committee last week and was able to come up with some recommendations for the government-owned business to prosper in the new year.
After working with the MMBA mentor, Kaspszak recommended the store work on an inventory control system, wine events, partner buying and proprietary products. Utilizing social media for marketing would also be beneficial, he said.
Whether the council will approve the recommendations is a question left for the next full council meeting.
“We’re working with Tracy for only a week to change the way they’re doing business,” Kaspszak said. “Tracy got out of the on-sale business a couple of years ago. There’s no reason an off-sale in Tracy, with a population of 2,060, can’t be successful. “
All they need to do was to get a better handle on trends, inventory control, pricing and opportunities out there to make money, he said.
“They have to accept they cannot go head-to-head with Marshall,” Kaspszak said. “They have to create their own niches, like holding wine events. People were excited about that.”
They could go to restaurants to hold them, was his suggestion. Both the restaurant and the liquor store would make money.
Another idea would be to make the store’s own six-packs of wine and spirits with a higher mark-up than their current pricing that still gives customers a good value.
“Total Wine, a national liquor operation in Twin Cities area with low-ball prices, creates disruptions in the market, moves retailers to proprietary products,” Kaspszak said.
Small businesses can be successful selling wine for an 80 percent mark-up instead of the higher mark-up Total Wine makes, he said.
Kaspszak explained that 45 to 50 percent is the normal mark-up on wine. Total Wine marks up 100 to 300 percent or more.
Another idea was to partner purchase the inventory with a restaurant or another liquor facility in a nearby town.
“Buffalo Lake and Fairfax purchase these products and marking up only 80 percent,” he said. “It’s called ‘group buying.’ It’s how you buy and how you sell that creates success.”
Selling name brand beers pays for the lights, Kaspszak said, but building your own six-packs (of wine and spirits) helps make more money.
Kaspszak said he had heard complaints about Tracy area residents buying in Marshall, and admitted that “a lot of people will continue to shop in Marshall because that’s what they do, but there are also a lot of people that will come back to Tracy because they have no need to go out of town.”
Some more ideas he brought to the table with him included reviewing the store’s credit card costs. He also recommended a computerized point of sale system to improve operations.
“There’s no reason that facility can’t succeed,” Kaspszak said.
Kaspszak was thinking the Tracy Liquor Store would hop on the bandwagon and get a wine event planned within the week. Council members weren’t planning on moving that quickly.
“There’s no date set,” councilman Dave Tiegs said. “No plans put together of any kind whatsoever.”
The council, though, decided to have Kaspszak come to the next meeting to share his ideas with the whole board before a public hearing on the matter.