The beer, wine & liquor store sales in the United States is driven by 30,000 retail stores generating approximately $50 Billion in annual revenue. The industry continues to consolidate across the United States with the Big Box chains taking greater market share every year, exerting increasing pressure on the smaller, independently-owned liquor stores across the country. In many industries, franchising has become a path to help locally owned businesses compete with the corporately owned Big Box chains. This is not the case in the retail liquor industry due to the amount and diversity of state level regulation and legislation across the US landscape. These state-level regulatory differences in the distribution and sale of liquor lead to continued fragmentation amongst the smaller, independent liquor store retailers across the country making it impossible for the independents to generate the typical economies of scale normally present in mature regional and national retail chains.
This business “Darwinism” will reward those independents that create and sustain competitive advantage and dismiss those that remain stagnant and fail to evolve
Despite these challenges facing the independent liquor store retailers across the US, there is still a place in the industry for well-managed independents to serve their respective local markets as evidenced by the thousands of independent liquor retailers currently operating across the US. Consumers appreciate the convenience, product knowledge, and personalized attention of the independents and enjoy supporting locally owned businesses as well. The consolidation and changing dynamics of the industry will continue to exert increasing pressure on product margins and on the independents themselves to improve their value proposition to the consumer and carve out and protect their respective niche within each local community they serve. This business “Darwinism” will reward those independents that create and sustain competitive advantage and dismiss those that remain stagnant and fail to evolve with the industry and consumer expectations.