Denver liquor shops — big and small — blame wine in grocery stores for falling sales

The vote by a slim majority of Coloradans to allow wine to be sold in grocery stores has led to a drop in sales at mom-and-pop liquor shops in the three months since the new law took effect, according to store owners and the state’s independent liquor store association.

“We’re screwed,” said Lisa Von Feldt, owner of The Wine Seller and Spirits Too at 600 E. Sixth Ave. in Denver. “I hate to say it’s the end of an era, but I’m afraid it could be for a lot of people.”

Von Feldt’s corner shop was handed down to her by her father, who bought it from her uncle. “All of the liquor stores in Denver started out that way,” she said.

Today, the Colorado market is no longer solely made up of family-owned liquor stores. Not only have national chains and big-box liquor stores entered the mix, but privileges once reserved for these establishments — the sale of wine and full-strength beer — are now shared with grocery and convenience stores.

At Von Feldt’s store, sales are now down “a solid 30%,” she said. Sales have fallen anywhere from 10% to 60% among the 250 members of the Colorado Licensed Beverage Association, which represents the interests of the state’s broader industry of 1,600 independent liquor stores, executive director Chris Fine said.

Across Colorado, grocery and convenience stores started selling wine on March 1 after Coloradans narrowly passed Proposition 125, with 50.6% of the vote. The measure granted any store already licensed to sell malt beverages the ability to sell wine, too.

Full-strength beer also has been available on grocery store shelves since Jan. 1, 2019.

As of March, about 3,500 food and beverage retailers called Colorado home, bringing in more than $2 billion in gross sales, according to Colorado Department of Revenue data. That’s a little more than March 2022, with reports showing around 3,350 retailers, with $1.8 billion in sales.

But the numbers don’t paint a full picture, as the Department of Revenue doesn’t break down its sales data further by type of retailer nor does the agency carve out wine or beer sales specifically, spokesperson Daniel Carr said.

Statewide, around 2,000 fermented malt beverage and wine licenses are documented by the agency, with familiar brand names collectively holding hundreds of them: 7-Eleven and Circle K convenience stores, Target retailers, Trader Joe’s grocery stores and more.

Around 150 King Soopers and City Market locations hold those licenses, according to state records. “Our customers are looking for the convenience of a one-stop shopping experience that allows them to pick up a bottle of wine with their groceries,” said spokesperson Jessica Trowbridge.

And statewide, 100 Safeway and Albertsons stores carry beer and wine, with 10 of those stores in Denver, spokesperson Kristine Staaf said. “We are always looking to expand our wine and beer offerings,” she added.

Months after the wine sales went into effect, some consumers still haven’t clocked much of a difference.

“My shopping habits for beer and wine have not changed one iota,” said 75-year-old Larry Feierstein, who takes brands and prices into account before making a purchase. “I have never been a mom-and-pop shopper. It’s big-box liquor stores that draw my attention.”

The Englewood resident voted in favor of the measure, but, “I have yet to see major savings by buying beer and wine at a grocery.”

Meanwhile, mom-and-pop shops are grappling with the combined competition of those grocery, convenience and big-box liquor stores, which could ultimately mean sink or swim for their businesses.

“We took a huge hit,” Von Feldt said. “I’d sure like to not see every single small liquor store close in this state.”

But establishments like hers “make a modest amount of money,” often operating without a plump cushion of savings.

Instead, she’s forced to keep other options in mind, including the possibilities of shortening her store’s hours or letting go of employees, “which, to me, is the biggest shame.”

Von Feldt said she treats several of her employees like her family – and three of her relatives even work there.

“Who do I tell that I’m firing?” she said.

“It’s only going to get worse”

Even the larger stores in the Denver market, such as Argonaut Wine & Liquor at 760 E. Colfax Ave., are feeling repercussions from the passage of the ballot measure.

“As soon as it went into effect, we started feeling it right away,” said President Josh Robinson. “I think it’s only going to get worse.”

Robinson is the fourth generation of his family to run the store that his great-grandfather bought in the 1960s. He notes that the earliest mention of Argonaut that they could find predates the Prohibition Era, which started in 1920.

Robinson serves as one of several sommeliers on the store’s staff, with wine making up Argonaut’s highest profit sector. Today, those sales are off by about 23%, he said.

“When you lose that, you’re losing a lot of your profit and the money you use to pay employees and keep your building up,” he said.

Meanwhile, he said total business is also off – close to 13%.

“We don’t have the cash flow we used to to be able to take some risks on some smaller brands,” Robinson said. Argonaut has not only cut down on its number of products, but it’s also reevaluated its plumbing, repair and other local service contracts to find lower-cost providers.

Its team, which is between 80 to 85 members, is also smaller these days, with around five fewer full-time employees.

Argonaut has started to carry snacks, “which is not our core business at all,” to compete with grocery stores.

“Convenience has a cost,” Robinson said. “There’s a huge widespread impact to your community, just based on where you decide to spend your dollar.”

“It’s a bigger deal than just us”

Peter Mitchell, 35, said his favorite mom-and-pop shop in Aurora shuttered its doors for good.

Now, he either frequents Alameda Liquor Mart or Big Liquor Warehouse.

“I voted against the proposals,” Mitchell said. “The quality of product at grocery stores isn’t good.”

The Colorado Licensed Beverage Association’s Fine attributes the downturn among independent liquor stores to several factors: a lack of foot traffic, the economy’s impact on consumers and Colorado’s now-saturated market.

Before Proposition 125 passed, internal estimates by Fine’s group indicated that 400 to 600 stores would be “in dramatic jeopardy of losing their businesses” if the measure became a reality.

Back then, “92 cents out of every dollar that was spent at those stores was staying here,” Fine said.

But he points to “repercussions that I think voters just did not see” — like money flowing out of Denver. “Now, it’s more along the lines of 30 cents for every dollar is staying here, and the other 60 is going to Cincinnati or out of state.” The headquarters of the Kroger Co., which owns King Soopers, is located in Cincinnati.

Today, “we have seen folks who have got out of the business” by selling their establishments, Fine said, although his association hasn’t yet seen “mass closings.”

Ultimately, “it’s a bigger deal than just us,” he added. Niche producers, including craft brewers, are also “freaking out” as their options for purchasers dwindle.

With beer and wine now permitted in grocery stores, “when are they going to come after spirits?” Fine asked.

“The importance of every single bottle”

Jason Hornyak, a Denver resident, voted in favor of Prop 125 in November. “But only because I don’t believe the government should get to somewhat arbitrarily decide what stores can sell what things.”

The 37-year-old, whose go-to wine and spirits store is Lowry Liquors, admitted that “it was not an easy decision for me.” He worried the proposal would hurt small shops.

So far, Hornyak’s unimpressed with the selection in grocery stores, pointing to “their inability or lack of desire to stock anything other than mass-produced, lower-quality product.”

“People like me who are more serious about buying wine are still incentivized to shop locally,” he added.