Liquor stores face new challenges as states reopen after coronavirus lockdowns

Key Points
  • Liquor stores have largely remained open throughout the pandemic, qualifying as essential businesses under most state guidance.
  • Restaurant closures have also forced several liquor stores to lose a large income source once food establishments stopped ordering bulk alcohol shipments.
  • The pandemic pressured wine and liquor stores to limit in-person capacity to decrease the spread of the coronavirus. But these restrictions were not received well in many locations.
A person leaves a liquor store in the Williamsburg neighborhood of Brooklyn during the coronavirus pandemic on May 7, 2020 in New York City.
Rob Kim | Getty Images

As restaurants and stores begin to reopen after months of closure, liquor stores will be forced to make even more extreme adjustments. 

While much of the country stayed at home, liquor store owners and employees continued to run these businesses, but with fewer resources. Staffers have had to respond to high-stress incidents more frequently, often the result of people who were frustrated with staying indoors most of the time. 

The coronavirus pandemic pressured wine and liquor sellers, which were deemed essential businesses by certain state guidelines, to limit in-person capacity to decrease the spread of the coronavirus. But these restrictions were not received well in many locations. Customers in some cases became enraged by being asked to wear a mask inside, one store manager told CNBC. 

Restaurant closures have also forced several liquor stores to lose a large income source once food establishments stopped ordering bulk alcohol shipments. 

"Walk-in and retail business has increased by 22% from March 16th to today," said Alex Le, co-owner of Nasa Liquor in Houston, Texas. "However, overall business is at average pace, with the loss of bar and restaurant businesses."

Multiple shop owners and employees told CNBC about the challenges of running a liquor store during a pandemic, including fears about tension with customers and concerns about demand returning to pre-virus levels. Here is what they had to say.

Operating under quarantine

In New York, Park Avenue Liquor Shop, which normally caters to residents in the area, saw many of its usual customers flee the city once the coronavirus struck, said the business's vice president, Jonathan Goldstein. 

The store has still been fulfilling resident orders and delivering, but in fewer quantities than ever. To cope with fewer orders, Goldstein had to lay off a few employees.

"I reduced my numbers and have no idea if business will warrant an increase in the upcoming months," he said. "The people I still have here are braving the unknown but are being extremely careful."

In the store, employees wear masks and gloves and sanitize after each transaction. 

Other New York liquor establishments, like bars, have offered takeout drinks, resulting in people lining up to order and standing around or near the vicinity to consume it. In normal circumstances, alcohol cannot be consumed in public spaces, including on streets and in parks. 

Because of shelter-in-place guidelines and because many stores and restaurants closed to stop the spread of the virus, liquor stores have become a reliable way to break the day's flow. 

"Being open and with people working from home, we are seeing people we're not used to seeing during the day, whether it be professionals who are usually in the office or teachers who are usually in the classroom," said Le of Houston-based Nasa Liquors. Le brought on an extra employee to help with inventory and cashier duties and respond to the influx of people entering the store. 

"We've also implemented sneeze guards, are wiping counters and door handles after every customer, and are limiting to 10 people in at once," Le told CNBC. "Overall, operational costs now include increased expenditures on cleaning supplies, which is an estimated $200 a month."

Anna Trueman, wine manager at Bourbon Street Wine and Spirits in Phillipsburg, New Jersey, said her store has also been busier than usual. There are nine stores in the Bourbon Street chain, but her store, located near the border between New Jersey and Pennsylvania, has been fielding people from both states during the pandemic. 

For at least eight weeks, "we've been experiencing Christmas holiday-level crowds," Trueman said. "It's been absolutely insane. We're all working extra hours and it's crazy how much busier we are."

Some liquor shops have also struggled with replenishing supply or selling smaller brands, which have lost ground to the more familiar ones that usually sell out in stores. 

"There is no way for a small brand to make itself [known] without hand-selling," said Goldstein. Hand-selling can consist of offering in-store samples or playing up a smaller brand to make a sale through word of mouth or employee recommendation. These practices have paused in liquor stores across the country to avoid spreading the coronavirus and also to respond to the new demand levels. 

The pandemic has affected the supply chain at Nasa Liquor. Once the pandemic hit, distilleries worldwide have either limited or stopped production entirely.

"We often purchase barrels of bespoke whiskey, brandy, or rum from all parts of the world. The challenge is that each geographic location has their own stance on social distancing, reopening, and even guidelines on importing and exporting," Le said. "We have several of these barrels stuck in pipeline, which we were excited to release in the summer where sales usually increase, but have now been delayed until 2021."

Pat ODonnell, 34, buys a 1.75 liter bottle of Jameson Irish Whiskey at Supreme Liquor in Cambridge, MA on April 28, 2020.
Mathew J. Lee | Boston Globe | Getty Images

Respecting social distancing

Some customers are reluctant to wear personal protective equipment or ignore personal space when in stores, agitations that shop owners and workers fear will become routine throughout the reopening process. 

Trueman of Bourbon Street said she experienced a lot of customer pushback about wearing a mask indoors. 

Her shop has marked designated standing areas with X's to encourage safe social distancing, but customers frequently take no notice of or disregard them, she said. Customers "barely" respect social distancing around other customers, she said, but with staff, they "just walk right up." Nobody on staff has gotten sick yet, she said. 

"When people come in, they don't necessarily respect the staff here like they would a doctor or a nurse," Trueman said. "We have lots of gun nuts out here and I'm waiting for someone to walk in who's got a real chip on his shoulder and start waving their gun around."

Despite all the pressures, Bourbon Street co-founder Michael Wade has been impressed with his staff across the chain during the pandemic.

"Our staff, scared or not, showed up EVERY day for over three months and adapted to a brand new and very unknown environment," Wade said in an email to CNBC. "And they did it with a smile on their faces. I have never been more proud in my life."

At Park Avenue Liquor Shop, Goldstein took limiting in-store capacity to another level. Instead of allowing people to browse the store's liquor contents, Goldstein and his employees make suggestions and transactions at the door.

"Just as this virus was making headlines, we became concerned with people roaming throughout the store and touching things, sneezing, etc.," he wrote in an email to CNBC. "We made a decision to stop them at the entry and if a purchase decision needed some help then we would bring the options to them."

The challenges of reopening

Around the country, there's strong support for continuing to wear masks indoors as states begin to reopen. Many restaurants, universities, barbershops and liquor stores have announced they plan to uphold this guidance. 

State governments have put forth requirements for businesses to follow in order to reopen successfully. But these concerns take out all the predictability and planning out of reopening, as liquor stores across the country continue to face tests. Some liquor store employees and owners are concerned that patrons will choose to ignore protocol. And some fret that a second wave of the coronavirus, which health experts have warned about for months, will exacerbate this deviation. 

"If it starts to hit again, people are going to be over it and tired of it," said Trueman of Bourbon Street Wine and Spirits. "I just feel like tensions are going to get crazy." Trueman also said she worries that the 2020 presidential election will add to the tension. 

Other stores, like Nasa Liquors in Texas, are thinking about the business perspective. 

"The main concern is how bars and restaurants – a considerable part of our revenue, will respond to re-opening," Le said. "Some establishments we work close with have delayed opening, even past government reopening phase dates, until they feel it's safe to reopen. Others can't wait to reopen and unfortunately, some won't reopen."

But beyond the opening of supporting establishments, it's still unclear whether people will feel safe enough to shop as they did before the pandemic. The coronavirus has heightened the fear of engaging with people in close contact, and some shop owners are wondering if this behavior will stick around. 

Additionally, shop owners are thinking about how reopening will affect people's finances – and what toll that will have on their businesses.  

"Going forward we have no idea what will happen with our corporate business – will people continue to work in the city from an office?" Goldstein asked. "Tourism? Will people feel comfortable shopping in person? Inside a retail environment? Will there be any foot traffic? What about the upcoming holiday season? Will people feel comfortable spending money on gifts? Corporate spending?"