SIC 5921 Liquor Stores

 
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SIC 5921

Liquor stores are establishments engaged in the retail sale of packaged alcoholic beverages, including ale, beer, wine, and liquor, for consumption off premises. Stores selling prepared drinks for consumption on premises are classified in SIC 5813: Drinking Places (Alcoholic Beverages).

NAICS CODE(S)

445310

Beer, Wine and Liquor Stores

INDUSTRY SNAPSHOT

In 2001, according to the U.S. Census Bureau, there were 28,695 establishments engaged in the retail sale of packaged alcoholic beverages. The industry employed about 136,212 people with an annual payroll of $2.1 billion. By 2003, the total number of establishments grew to 33,902. Together, they shared $13.4 billion in annual sales. The total number of employees, however, remained about the same. The average beer, wine, or liquor store generated $400,000 in sales and employed about four people.

ORGANIZATION AND STRUCTURE

The liquor store industry is made up of mom-and-pop retail outlets, independently run chains, and corporate-owned stores. While the vast majority of stores are small, family-run operations, there are a rapidly growing number are superstores primarily engaged in other kinds of businesses.

Among the industry's top companies, most remained independently run during the 1990s. Increasingly, however, they changed their retail strategy, consolidating multiple outlets into fewer but bigger warehouse-style stores, thus saving on overhead and payroll while still moving a large inventory. The effect has been hard on smaller neighborhood retail operations comprising the bulk of the industry. As one small retailer observed in the New York Times in 1996, "This is a slowly declining industry. The mom-and-pop shops justcan't compete with the superstores and the discounters." State and national statistics reinforce the story. In 1970, the New York State Liquor Authority issued 5,070 licenses for new stores. By 1995, 46 percent of the shops had shut down. While the traditional corner liquor store remains a fixture in most American towns, its future can no longer be taken for granted.

BACKGROUND AND DEVELOPMENT

Throughout its history, the retail liquor store industry has been buffeted by changing social and political attitudes toward alcohol, and the sale of alcohol has always been highly regulated. The most severe period of regulation was the Prohibition era (1919 to 1933), during which alcohol consumption was completely outlawed by the federal government. Stores were forced to close en masse, and owners either left the business or went underground.

Liquor sales were legalized again in 1933, when it became clear that Prohibition had worsened bootlegging and facilitated the rise of organized crime. Responsibility for liquor regulation was returned to the states following Prohibition. Since then alcohol has been legally available in almost every part of the country, although a few localities remain "dry."But the nature of governmental regulation has varied markedly from state to state. Some states allow private ownership, while others restrict the sale of alcohol to state-run outlets. Some states permit grocery stores to sell wine and liquor, others do not. Some states tax liquor sales heavily, while others impose little or no taxation. In no state, however, is the production, distribution, and sale of liquor unlicensed or unregulated.

In 1978, many states deregulated liquor prices that had been set by the government. Deregulation allowed supermarkets and convenience stores to enter the business, which increased pressures on traditional corner liquor stores at a time they were already experiencing shaky profit margins. To compete, small retailers lobbied for permission to sell peanuts and other ancillary goods, such as finger foods, corkscrews, gift baskets, and lottery tickets.

State and local governments across...

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