MARSHALL — The COVID-19 pandemic has been a major challenge for businesses around Minnesota. But in some cases, it’s had an unexpected effect — sales at Marshall’s municipal liquor store have been way up in the past few months, said manager Eric Luther. He thinks it may be because customer behavior has changed, with more people buying beer, wine and liquor instead of getting drinks at bars or restaurants.

“I think that change, we’ll see for a short term here,” Luther said Tuesday afternoon.

Luther presented the 2019 annual report for Tall Grass Liquor to the Marshall City Council on Tuesday. However, he also gave an update on the first six months of 2020, which have been heavily impacted by COVID-19 response.

Tall Grass Liquor had a profitable year in 2019, Luther said. The store had overall sales of about $5.5 million, with a net profit of around $588,000. That was a net profit increase of $129,000 from 2018.

The months of May through August, and the December holiday season, are usually when Tall Grass Liquor sees its strongest sales, Luther said. But this year, Tall Grass had December sales levels in March when bars and restaurants closed down in Minnesota. Sales in May and June each surpassed December 2019 sales.

For the first six months of 2020, Tall Grass Liquor had total sales of about $3.2 million, compared to about $2.5 million in the first half of 2019. That’s an increase of more than 27%, Luther said.

“All those business indicators have really gone through the roof,” Luther told city council members. The sales increases could possibly benefit the city. Funds raised by the liquor store can be used to help pay for city projects.

While sales have spiked, Luther said Tall Grass has had some supply chain challenges because of COVID-19, much like grocery stores have. There have been times where the store hasn’t been able to keep certain products in stock. Increased sales have also meant more work for city staff stocking shelves.

In spite of that, he told council members, “I think we’re off to a good start for 2020.”

In sales, Luther said, “Domestic beer, and beer in general, continue to lead the product mix” at Tall Grass Liquor. But while beer sales made up the majority of Tall Grass’s sales in 2019, they didn’t account for the majority of profits. In 2019, sales of wine made up 34% of the store’s profits, compared to 28% for spirits and 21% for beer. Sales of mixers and other merchandise made up 35% of profits in 2019.

In spite of the spike in sales in early 2020, Luther said he was taking a more conservative approach for the liquor store’s proposed 2021 budget. Although changes in customer behavior could benefit Tall Grass in the short term, “We’re not taking that spike into consideration” for estimated sales, he said.

Luther said Tall Grass Liquor had invested in some improvements to the store, that are being put in place this year. Some of the new additions include a self-service cooler near the checkout area for “add-on” sales, as well as a new point-of-sale system that will work better for curbside and in-store pickup orders. Luther said Tall Grass is also in the process of getting new signs to mark different sections of the store, that will incorporate a similar design to the store logo.

New signage above the beer coolers, that fits with the store logo, is an item Tall Grass would also like to include in its 2021 budget, Luther said.