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Prop 125 Puts the Squeeze on Mom-and-Pop Liquor Stores

In March 2023, Proposition 125 went into effect allowing grocery and convenience stores to sell wine in addition to beer. The ordinance, which was promoted as a convenience for the average consumer, has crushed many family-owned liquor stores in the Denver community. 

Wadsworth Liquor & Wine is one of the roughly 1,600 independent liquor stores most affected by Prop 125. The store sits in the same strip mall as a King Soopers on the corner of Wadsworth and Jewell. Owner Rosie Gantos reported the store has seen a steep decline in revenue since the law went into effect. 

“Our sales have gone down by at least 40% since March,” Gantos said. “Customers are more likely to get their wine for dinner at King Soopers when they might have used to stop by our store.”

Even those not located next door to a major grocery chain have felt the pinch. Lisa Von Feldt owns The Wine Seller and Spirits Too, a neighborhood liquor store opened by her father and uncle in 1976. The store is located off 6th Avenue and Pearl Street and has a Trader Joe’s, Safeway, and King Soopers in close proximity. 

“We immediately saw a drop in one-third of our overall sales,” Von Feldt said in response to the new law. 

Both Gantos and Von Feldt’s stores placed a priority on wine sales for their stores’ overall revenue. Nearly half of both shops’ sales floors are dedicated to a fairly large wine selection. However, as grocery stores dedicate more shelves to wine, the owners feel unable to continue selling certain brands. 

“The Safeway up the street has a bigger wine department than our entire store,” Von Feldt said. “We don’t have the money to sit on 50 cases of something. The longer it takes to sell, the more you’re just renting space instead of turning it over to pay the bills.” 

With only 800 square feet of sales floor space, Von Feldt is limited in what she can provide for her customers compared to the large stores that surround her. She estimates that the Safeway near her has 1,000 square feet devoted to reds, whites and rosés. Her limited resources are no match for the massive corporations that she must compete with. 

“I have some loyal customers who are willing to spend $3-4 more for the same bottle because we can’t buy it for what [other stores] sell it for. How do you compete with that?” a worn-down Von Feldt asked.

Gantos also mentioned the challenges her store faces when dealing with suppliers, who give priority to bigger contracts, leaving small businesses guessing at what they should try to stock at their stores. 

“It’s tough since bigger contracts may be buying $20,000 worth of product, but our order is $2,000 or less generally. [The suppliers] aren’t going to be honest with us about what we should avoid or what we should buy more of,” Gantos said. “Not getting that information from them has made it difficult for us.” 

Due to these new problems, the two owners have had to adjust their business model to keep their stores from going under. Both have started focusing on carrying more specialty wines and alcoholic beverages that are uncommon in bigger stores. 

“We started going to smaller wineries and companies to have a more unique selection of specific wines and we’re hoping that could help out a bit,” Gantos said. 

Von Feldt took a slightly different approach by bringing in more imported wines, moving away from domestics. She also mentioned the importance of latching onto local breweries and has dedicated more shelf space for their products. 

“We used to have whole [fridges] for the big brands of beers, but we consolidated them down to one,” Von Feldt said. “It’s worked out okay because we’ve been able to fill our coolers with a fun, off-the-wall, bizarre group of beers that we rotate through pretty regularly.”

Non-malt-based hard seltzers have also been a savior for Von Feldt, who was an early seller of the popular cans that fill coolers on hot summer days. Since they contain hard liquor, grocery stores can’t stock them. Still, the strategies implemented by both owners have not been entirely sufficient in trying to keep their businesses afloat. Gantos has cut her salary by 40% and had to cut hours for her employees. Von Feldt’s cuts have been similarly drastic. She’s had to let go of one full-time employee and change hours of operation. 

“We’re not getting rich over here. We provide a decent living for our employees so that they can have a nice place to live, maybe take a vacation once a year. That’s our main goal,” Von Feldt said. 

With Proposition 125 going into effect just six months ago, it’s difficult to say whether the short-term effects experienced by independent liquor stores continue into the future. Regardless, the domination of large corporations feels inevitable for the owners. 

“These big companies or interest groups have the money to support different [initiatives] to put on the ballots and they will be the ones who profit from it,” Gantos said. 

“The money that they make in wine at a Safeway or King Soopers goes back to the corporation,” Von Feldt said. “When we sell stuff, the money stays in Denver because we turn around and buy things here. If we have to cut back hours for employees, that’s more money out of the local economy. I don’t know if anyone thought about that.”

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