It was another banner year for Minnesota municipal liquor operations in 2019, with stores reporting a 24th consecutive year of record sales.
In 2019, municipal liquor operations reported sales totaling $372.1 million, an increase of $11.9 million or 3.3 percent over 2018’s numbers, according to a report released Friday by the state auditor’s office.
Although just 18 of the 182 Minnesota cities that own and operate 215 liquor stores are in the metro area, they represent 35 percent of the sales and nearly 33 percent of the net profit.
Sales ranged from a low of $122,000 in Elmore in Faribault County to a high of $16.3 million in Lakeville. The order of the top five sales generators stayed the same as 2018, with Edina’s $13 million coming in second behind Lakeville, followed by Richfield ($12.6 million), Eden Prairie ($10.9 million) and Apple Valley ($9.8 million).
Lakeville, a growing south metro suburb of nearly 66,000 residents, has run the state’s largest municipal liquor operation every year since 2002 and has been either first or second annually since then in net profit.
But the profit honor for 2019 goes to neighboring Apple Valley, which pulled in $1.3 million at its three stores. Edina came in second with $1.2 million, followed by Lakeville ($1.1 million), Elk River ($1.1 million) and Detroit Lakes ($1 million) rounding out the top five.
Overall, 92 cities showed year‐to‐year increases in net profits, while 89 showed decreases. Of those 89, 83 were outstate and six were in the metro area, with Lakeville seeing the biggest decrease with $1.5 million less profit than in 2018, according to the report.
But the report does not tell the whole story, Lakeville City Administrator Justin Miller said Friday. The 2019 profit numbers are skewed, he said, because 2018’s included $2.3 million the city brought in from the sale of its Kenrick Avenue store, which the city now operates under a lease.
Lakeville actually pulled in $1.2 million more in sales last year compared to 2018, and had an increase of $1.1 million in operating expenses.
Statewide, the net profit of municipal liquor stores totaled $27.9 million, representing a decrease of $1.1 million over 2018. Generally speaking, profitable municipal liquor operations provide another revenue stream for cities for things like building maintenance, capital equipment and bond payments.
Other highlights from the report include:
- Thirty-three cities — all outstate — reported net losses for 2019, which was five fewer than 2018.
- The number of cities in the liquor business fell by eight, with operations in Clontarf, Conger, Erhard, Flensburg, Parkers Prairie, Rush City, Sleepy Eye and Spring Lake Park shutting down.
The report did not specify how Sunday sales affected both revenue and operating expenses in 2019. The state began allowing Sunday sales at liquor stores on July 2, 2017.
“Off-sale is where you would see an extra day’s worth of labor and that might affect operating expenses,” John Jernberg, a research analysis specialist for the auditor’s office, said, noting city-run bars have been open on Sundays for decades.
Off-sale operating expenses totaled $53.6 million in 2019, representing an increase of $2.4 million or 4.6 percent over 2018, according to Jernberg.
State Auditor Julie Blaha noted her office will be challenged with understanding 2020’s numbers and how they reflect the pandemic, which caused high sales initially but also forced many stores to temporarily shut down and increase spending to combat the virus.
To view the 2019 report, go to auditor.state.mn.us/default.aspx?page=20201217.001.