City liquor sales up nearly half million over '07
Sales at the Perham municipal liquor store increased by nearly a half million dollars from 2007 to 2008.
Year-end financial reports have been released on the municipal-run store's performance. Sales in 2008 increased an estimated 33 percent over 2007.
The new store, with its highway location, opened in early spring. So, the store didn't have a full 12 months of sales at the new site. Still, gross sales in 2008 were $1.99 million--compared to $1.52 million in 2007.
"If you consider it was only nine months in the new store, and some of the unusual expenses we had as a starting operation, I'm fairly pleased," said Perham Mayor Kevin Keil. "2009 will be a true test of where we're at, and give us a true reflection of what we can do."
In terms of operating profit, the store earned $283,222 in 2008--compared to $221,821 in 2008.
But debt service was $53,799--compared to only $14,628 in 2007.
Also, the remodeling of city hall, including the downstairs Chamber of Commerce headquarters, tapped $125,000 of the liquor store profits. A total of $245,750 was transferred from liquor store proceeds to the city's general fund and the remodeling. Last year, only $193,999 was transferred from liquor store revenues to the general fund.
The liquor store was also tapped for a $10,000 donation to the Perham Area Community Center, which was not the case in 2007.
With the debt retirement and the unusually high transfer of revenue, the actual bottom line was a $22,163 loss--compared to a $9,346 gain in 2007.
"Our goal was to transfer as much as we ever have to other city expenses, and still service the debt, so we're fairly pleased," said Keil.
If not for the $125,000 transfer of funds to the city hall remodeling project, the store would have shown a $100,000 profit--after all expenses, including debt repayment.
Wages were up about 9 percent, but that was expected because of the expansion of the facility and the increased retail traffic. In total, salaries and wages were $99,609 in 2008--compared to $90,025 in 2007.
With the increased inventory for the larger store, freight costs were up about $5,000. Also up were credit card fees, by about $5,000, due to the increase in retail transactions.
Insurance premiums, likewise, rose in correlation with the value of the new facility--by $5,000.
Utilities were $10,000 more than last year, with $14,471 in utility costs for 2008, compared to $4,165 in 2007.
The 33 percent increase in total sales is actually ahead of projections, noted Keil. The city was aiming for at least a 25 percent increase in the first year.
"Our goal is to have the place double in sales within a few years--and ultimately, it looks like we'll get there."