If you’ve considered starting a retail liquor business in BC, buying a liquor store may be the most lucrative option with lower risk than other types of liquor businesses. Pubs, night clubs and licensed restaurants depend much more on popularity, location and marketing, than do Licensee Retail Stores (also known as “private liquor stores”).
Thrive Liquor & Cannabis Advisors has helped many investors research and purchase a store and its Licensee Retail Store license. For the uninitiated, when you buy a liquor store in BC, you’re really buying the liquor store license and the store’s assets.
Following are five reasons you may want to consider buying a liquor store in BC:
As we’ve all learned in recent times, pandemics are a new reality. From 2002-2004, the pandemic was SARS; in 2009 it was H1N1 (or “Swine Flu”); and in 2019/2020, COVID-19. Nobody knows when the next pandemic will hit, but scientists agree that another pandemic is inevitable.
Early in the COVID-19 pandemic, pubs, night clubs, and restaurants either shut down completely, or had to pivot to delivery or pick-up services. For private liquor stores, which were deemed an essential service, it was more-or-less business as usual…and then some!
In March 2020, the early days of the COVID-19 pandemic, BC government liquor stores reported a 40% increase in counter sales. For example, sales of spirits in 1.75 litre containers increased by 153% and sales of 24-packs of beer increased by 120%. According to the Global News article “Liquor stores across B.C. see record sales during coronavirus pandemic“, private liquor stores experienced a similar sales boom.
Buying a liquor store means no start-up risk because everything you need is already in place. When you buy the store, you buy the Licensee Retail Store license, a proven track record in sales, inventory, and assets, and take over the lease or mortgage. Business processes are in place and often honed by experience, so you don’t have to reinvent the wheel, or go through the many growing pains faced by owners of new liquor store builds. While new liquor store builds are an option, and often more cost effective than a turnkey store. The risks are significantly greater. If you wanted to build your own liquor store, you would be required to find a license from a current licensee, relocate it to a site outside of 1km of another store and ensure the site is zoned accordingly. This process can take upwards of 12 months with no guarantee it will be successful.
As mentioned above, a turnkey solution has everything you need. Once the purchase is finalized, there is virtually no start-up time involved. When you apply for a liquor license and build a liquor store from scratch, it may be up to two years or more, from the early planning stages until you open for business.
IMPORTANT: The BC government has placed a moratorium on new Licensee Retail Store licenses until July 1, 2022. It is possible this date could be extended for another long period of time. It is currently under review with the provincial government. Therefore, buying a liquor store in BC is your only option at this time. So, the easiest choice is to buy an existing liquor store!
If you buy a liquor store, you don’t need to research and purchase initial stock. Buying a store’s initial stock isn’t as simple as you might think. You’ll need to know what sells, what has the best profit margins, what doesn’t sell, and what “loss leaders” you should stock to get customers into the store. If you build a liquor store, you’ll also have to make many decisions about the store layout including the location of shelving, refrigerators, and the location of inventory on shelves and in fridges. When you buy a liquor store, these things have already been figured out.
If you buy a Licensee Retail Store that has been open for a few years or more, you can be more certain that it has staying power. The store already has customers, predictable revenue, expenses, and cash flow. When you start a private liquor store from scratch, revenue, expenses, and cash flow are educated guesses at best, that exist only in budget projections, until the real numbers roll in.
If you want to buy a liquor store in BC, talk to the experts at Thrive first! Book a free one-hour consultation. We connect potential buyers with vetted sellers and facilitate the sale by auditing liquor store operations long before you sign on the dotted line!Book a Complimentary 1-Hour Consultation Today!