Weak sales prompt Rowan-Kannapolis ABC Board to investigate ways to cut costs

Tuesday, June 16, 2009 11:50 PM  |  Printer friendly version | E-mail to a friend |

By Jessie Burchette

jburchette@salisburypost.com

Two Kannapolis liquor stores with weak sales may face cuts in operating hours.

And inventory is being reduced substantially in another Kannapolis store.

Terry Osborne, general manager of the Rowan-Kannapolis Alcoholic Beverage Control system, updated the board Tuesday evening on efforts to cut costs.

Ken Argo, a board member from Kannapolis, warned of potential tough times ahead.

"We've not been touched hard by the economic conditions É we've been lucky," Argo said. Pointing to the sales for the month of May, Argo said the economic conditions are beginning to take hold. "It will be a challenge next year. É We face tough times."

Although bottled liquor sales have continued to increase, the system is seeing a dramatic drop in sales to liquor-by-the-drink customers.Total sales for May were $798,000 compared to $810,000 for May 2008, for an overall drop of $13,000. Liquor-by-the-drink sales totalled $68,000, down almost $20,000 from May 2008.

Sales at the three Kannapolis stores opened since the merged system continue to show mixed results.

Sales at the Renaissance Square store off N.C. 73 near the Mecklenburg line were $60,000 for May, up nearly $15,000 from last May.

Sales at the Oak Avenue Mall store near the N.C. Research Campus declined from $74,000 last May to $70,000 last month.

And the Gateway Center store on N.C. 73 showed 2 percent growth from $50,000 to $51,000 in May.

Osborne said he plans to meet today with the managers of the Gateway and Renaissance Square stores to look at cutting hours, possibly opening at noon and closing at 8 p.m.

He said the stores have few customers in the morning hours and the cutback should not affect sales.

Once set, the new hours will be posted in the stores.

Marny Hendrick, board chairman, also advised putting up signs that all stores will be closed on Saturday, July 4th, a mandatory state closing.

Osborne also cited the overall effort to reduce inventory in the stores, starting with the Oak Avenue Mall store. The plan includes removing larger items and products that don't sell quickly and replacing them with smaller bottles and product that moves more quickly.

The board is also looking at other ways to reduce costs, including possible buy-outs of employees who have passed retirement age.

The board recessed its meeting until Monday at 5:15 p.m. due to the absence of board member Gus Andrews, who was out of town.

The board plans additional discussions, including preparing for the upcoming visit of an efficiency committee from the N.C. Association of ABC Boards.