Local liquor stores prepare for increased competition after Proposition 125 passes | VailDaily.com

Local liquor stores prepare for increased competition after Proposition 125 passes

Grocery and convenience stores will be able to sell wine starting in March 2023

Local liquor stores are adapting business strategies to remain competitive with grocery retailers.
Justin Q. McCarty/Courtesy photo

After two weeks where results were too close to call, the Associated Press announced that Proposition 125, which allows the sale of wine at grocery and convenience stores, passed by a razor-thin margin of 50.6% to 49.4%. This vote aligns Colorado policy with the vast majority of the U.S., as it is the 40th state to allow the sale of wine in grocery stores. 

Grocery stores will be able to start stocking their shelves with wine starting in March 2023, and local liquor stores are preparing to weather another disruption to the market. This is the second major change in alcohol retail laws in three years, after Senate Bill 197 enabled the sale of full-strength beer at grocery and convenience stores in 2019.

Liquor store owners are anticipating a direct hit in revenue and the need to adapt their business strategies in order to remain competitive with the expanded retailers. Peter Cuccia, owner of Village Warehouse Wine & Spirits in Avon, expressed frustration at how the changing laws are impeding growth for small business owners.

“Everybody wants to grow their business, and then with laws that change, it’s like trying to drag a ball and chain along with you,” Cuccia said. “How would you like it if you had four or five more places in Avon that were selling the goods and services that you provide? It’s going to affect all the liquor stores just because that pie is now sliced in a lot more slices than it used to be.”

Geoff Moser is a co-owner of Boone’s Wine and Spirits, a store located directly next door to the City Market in Eagle. When the store opened in 2015, proximity to grocery shoppers was a clear advantage, but with the law changes Moser said that they have to be strategic about competing directly with the supermarket product offerings.

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“It (Senate Bill 197) had a direct impact on our beer sales, and I expect that wine will have a direct impact on our wine sales as well,” Moser said. “We’re going to have to come up with another strategy for sure. Maybe more of an advertising strategy where we focus on how good our customer service is and the things that we offer that the grocery stores and convenience stores can’t offer. All they can offer is convenience, that’s it.”

Mom-and-pop liquor shops, many with just one store location, are concentrating more than ever on craft beers and rarified offerings that the big-box stores won’t be able to provide customers. David Courtney, the owner of Beaver Liquors in Avon, said that while he is concerned about the impact of Proposition 125 passing, he believes that local retailers in Eagle County will survive the change because of the high demand for unique and high-quality products over simple convenience.

“We’re semi-insulated just due to the clientele that comes here,” Courtney said. “When you fly in on a private jet, you don’t drink grocery store wine. Those just don’t go hand in hand … I wouldn’t say I’m not concerned, but you’ve just got to keep doing what you’re doing and provide good customer service, and I think everyone’s going to be OK in these communities.”

Proposition 125 failed in the majority of Colorado counties, including Eagle County, where it was defeated 55% to 45%. The statewide win was primarily driven by voters in the Denver metro counties, and Courtney said it felt good to see that support from the local community.

“In these small little rural counties where people want to keep things local, we won, which was encouraging to know that people get it,” Courtney said. “I’ve been here a long time, and I’ve gone to tons and tons of charity events, or where people have been in trouble with medical bills, and it’s always local businesses that sponsor it. Never do you walk in and see, this one is sponsored by City Market or this is sponsored by Walmart, and I think people in our community and other rural communities like this understand that.”

Proposition 125 failed in the majority of counties, the win driven by voters in the Denver metro area.
Associate Press/Courtesy photo

Proposition 125 was the only one of three alcohol-related ballot measures that passed in November. The least popular proposition, both in Eagle County and statewide, was Proposition 124, which would have allowed a gradual increase in the number of liquor stores a single company can open in the state — currently limited to three — eventually reaching unlimited stores by 2037. The measure was defeated 62% to 38% statewide and did not pass in a single county.

Many owners wanted to see Proposition 124 voted down to protect small businesses against big chain stores, but Cuccia wrote an op-ed for the Vail Daily in favor of Proposition 124. He said that he is concerned that the combination of maintaining restrictions on store expansions and the growing competition from grocery and convenience stores will not only hurt revenue but drive down the value of liquor licenses in the county, squeezing owners even more.

“In my opinion, it would have made liquor licenses worth more money because there’s a possibility that a larger store may want to come in and buy your license,” Cuccia said. “Now with wine in grocery stores, as far as saleability of a liquor license, it’s probably driven that price down just because you’re not going to sell as much as you used to, so your store is not worth as much as it used to be.”

How dramatic the effects of the changing alcohol market remains to be seen, but owners are on their toes and ready to make whatever modifications necessary to continue attracting customers, and with continued community support, will navigate the impacts of Proposition 125.

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