Virginia, like every other state, is facing a budget shortfall because of the coronavirus pandemic’s impact on tax revenue, but there has been one bright spot: excise taxes collected from state-run liquor stores.
Virginia ABC gets about 18% of its liquor store tax revenue from licensees, such as bars and restaurants, but those sales fell to as little as zero to 2.8% between mid-March and mid-May. Spending by retail customers, on the other hand, has skyrocketed.
Consumer sales peaked during the week of March 15, when lockdown orders began, with sales up 59% over the same week a year ago. Sales in Northern Virginia alone that week were up 65%.
Virginia ABC has not released sales figures for May, but March and April saw double-digit year-over-year increases in sales every week.
“Individual purchases by folks who would have maybe consumed from a licensee are purchasing and consuming at home. So, in terms of what we’re seeing in our profits and the excise taxes that they’re from, we are generating more revenue than we expected this year,” Travis Hill, CEO of Virginia ABC, told WTOP.
Virginia ABC reports, for the period of March to May, that it saw about $25 million to $30 million in revenue growth attributable to COVID-related buying. For March 1 through May 27, revenue totaled $295.5 million, versus a budget of $250.8 million.
Those are revenue numbers, not profit numbers, and increases in expenses as a result of preparing stores for the pandemic have totaled more than $2 million.
The increase in sales at Virginia ABC stores has led to more jobs.
“We’ve actually been able to hire additional workers to fill our hours. In the warehouse as well, with the productivity we’ve had to step up some of the processes there. Our workers have come through for us day in and day out and have made this possible,” Hill said.
Virginia ABC stores have implemented a number of safety precautions at its stores, as have other retailers, including plexiglass dividers, shorter hours for more cleaning, and mask wearing requirements.
Almost all of Virginia’s 388 ABC stores now offer online ordering for in-store pickup, and ABC stores this week rolled out a curbside pickup option. Buyers can place their order online, and call the store when they arrive. An employee delivers their purchase to their vehicle in a contactless transaction.
Some products, largely high-end spirits, are in such demand that Virginia ABC has limited in-store purchases to just one bottle per customer per day. The list includes more than 40 spirits.
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