Gypsum’s Costco to launch in-warehouse liquor sales

GYPSUM — The intricacies of Colorado’s new alcohol sales law are being tested in Gypsum as Costco expands into liquor vending.

This action marks only the second application of the state’s new liquor rules, approved on the final day of the Colorado Legislature’s 2016 session.

On Tuesday night, March 27, representatives from Costco received unanimous approval from the Gypsum Town Council to purchase the liquor licenses held by Jake’s Liquor, the independent operation that is located at the Gypsum Costco building, and Mac’s Liquor, the business owned by Peter Struve located west of Ridley’s market. With these licenses now in hand, Costco plans to sell alcohol directly, with merchandise located in the main part of the warehouse.

“This is a relatively new process in Colorado,” said Brian Proffett, representing Costco.

Colorado Senate Bill 197 represents one of the biggest shifts in the state’s alcohol-sales laws since the 1933 repeal of Prohibition. The bill allows grocery chains to obtain as many as 19 more licenses per chain before 2037, when all restrictions on corporate liquor-store ownership go away.

The law specifies grocers are required to purchase the licenses of any liquor stores within a 1,500-foot radius if they expand into alcohol sales. Or, if there are not at least two stores in that area, grocers must purchase two licenses of stores within the same licensing jurisdiction.

Jake’s Liquor fits the first part of the new law; Mac’s fits the second.

Why Gypsum?

During their presentation before the Gypsum Town Council on Tuesday night, Costco representatives said they chose a local store because it represented a way to expand the Costco presence on the Western Slope. Costco successfully purchased two licenses and launched alcohol sales at its Lone Tree warehouse late last year.

The Gypsum store also complies with one of the provisions of the new state law. The law says that at least 20 percent of sales must be food products. At Gypsum, food sales represent 50 percent of total sales.

Jill Whittaker, regional manager for Costco, said the new alcohol sales display will be located near the bakery operation inside the warehouse. The former Jake’s Liquor space will be remodeled as an expanded pet supplies area.

“That is a really good category for us here, so we are excited to be able to expand it,” she said.

Whittaker said wine selection is a focal point of Costco alcohol sales. She estimated there will be around 150 wine options at the store, with prices ranging from $6 a bottle to $3,000 a bottle. The anticipated spirits options will number around 60 items, with prices ranging from $15 to $30,000.

There will also be around 18 beer options at the store.

In keeping with the Costco size model, beer will be sold by the case and alcohol will be sold in full-size bottles.

“We are Costco. Everything is big,” Whittaker said.

Compliance promise

As the Gypsum Costco launches alcohol sales, company representatives stressed the operation will strictly enforce the state’s liquor laws.

Along with regularly checking identification, clerks at the register will have to input customer age information at the point of sale. Additionally, clerks will be older than age 21 and everyone will be TIPS (Training for Intervention Procedures) trained.

At the display itself, shelves will be no taller than 5 feet and a supervisor will be stationed in the area to monitor shoppers.

“I have been at other Costcos that sell alcohol and they seem to work well,” said Gypsum Town Council member Chris Estes.

With Tuesday night’s approval, Costco anticipates launching its main warehouse alcohol sales in May.

Jake’s and Mac’s

As Costco takes over its licenses, both Jake’s Liquors and Mac’s Liquors have different plans.

According to Clay Williams, manager at Jake’s Liquors, the operation’s final day will be Sunday, April 15. Along with the license, the business operation will be sold to Costco. Williams said there are no plans for a big business closing sale.

“But I would probably stick my head in the last weekend,” Williams advised, noting that Jake’s will be reducing its inventory, particularly its high-end merchandise.

As for Mac’s Liquors, owner Peter Struve has applied for a new liquor license and plans to remain in the liquor sales business. His new license hearing is scheduled for Tuesday, April 10.

“We plan to shut down, rebrand and remodel for approximately seven days and then re-open,” Struve said.