Sunday Sales Analysis (12 States)

Prepared by: Distilled Spirits Council of the United States
Sunday Sales: A Commercial and Social Success
An analysis of states allowing Sunday sale of spirits since 2002
Washington, D.C.

11/12/2007

Sunday Sales: A Commercial and Social Success

Summary

Since a nationwide campaign advocating for increased availability of distilled spirits products was undertaken in 2002 12 new states have allowed package stores to open on Sunday.  This paper makes the following points:

In 2006 Sunday sales generated $212 million in new sales for retailers.  This figure is expected to increase annually.

Many states have adopted Sunday sales incrementally, either by allowing “local option” or, in Control States, designating that only a limited number of stores open.

In those states where data comes from government or was collected by trade groups (i.e. direct measures) sales have gone up an average of 4.4% with only 31% of stores open – a 9% increase projected statewide.

In each of the Control States the number of state-run or agency stores opened was increased after an initial trial period.

While sale of spirits on Sunday has been a commercial success, it has also been a social success as well.  Sunday sale of spirits has given modern two-income couples an extra day to shop for their preferred beverages.

There is often concern that Sunday sales of spirits will lead to an increase in either underage drinking or drunk driving.  However, an

analysis of government data showed that there was no evidence of an increase in either following the implementation of Sunday sales.

Each of these points is explored below.


I. New Retail Sales

A. Nationwide $212 million in new retailer Sunday sales revenues in 2006.

A Table 1 shows new retail sales from Sunday openings totaled over $212 million in 2006.  Large markets like New York ($92.3 million) and Pennsylvania ($29.1) were, naturally, able to generate the most revenue.  But, even retailers in smaller markets, like Delaware ($4.8 million) and Rhode Island ($2.6 million) have enjoyed increased sales.

Table 1


B. In those states where data comes directly from government or was collected by trade groups, sales have gone up an average of 4.4% with only 31% of stores open – a minimum increase of 9% when projected statewide.

Sales gains have come despite the fact that, in many states, Sunday sales are being implemented incrementally.  Thus, not all areas in each state allow Sunday sales nor are all stores eligible to be open.

For the five states listed in Table 2, actual sales data or survey data was available from the state itself, a state trade organization, or the National Alcohol Beverage Control Association (NABCA).  Thus, the data below are the most accurate figures developed to show the impact of Sunday sales.

Table 2

Table 2 shows the new case volume sold on Sundays from each of the five states.  The new Sunday volume is compared to total off-premise retail volumes to derive the Sunday impact.

In Pennsylvania with only 28% of stores open on Sunday, total retail volume has increased by 8.3%.

In Virginia and Washington, where only 17% and 18% of total package stores were open in 2006, the state saw 1.8% and 1.6% volume increases.  The Washington increase was particularly impressive given that the state instituted a 55% increase in their excise tax rate in July 2005 that would have still impacted growth rate comparisons for much of 2006.

In Ohio and Oregon where 43% and 50% of stores are open total off-premise volumes have increased by 3.9% and 5.3% respectively.

On average, with only 31% of stores open, retailers have enjoyed a 4.4% increase in sales. Projecting the actual results to full store participation, the five states would all increase sales volumes by over 9% statewide.  These projections are consistent with published econometric studies of Sunday sales impacts.[1]

C. After initial success Control states opened more stores on Sunday, despite the need for legislative approval.

In Controls states that have allowed Sunday sales of spirits since 2002 there has been a supplemental expansion in the number of stores that states are allowed to be open.  This expansion is a strong endorsement of Sunday openings.

Liquor Control Boards in Control States are responsible for generating revenue for their respective state treasuries.  Just like any business, they are accountable for the additional costs of being open. Unlike a private operator, state board members will not enjoy higher personal profits or bigger bonuses if they are successful – new profits simply fill state coffers.  For a state board member there is little incentive to take a risk.  However, even in such a risk adverse environment the economics of Sunday sales have proven to be so overwhelmingly positive that every state that started Sunday sales has opened additional stores.[2]

Table 3

The support for Sunday sales in the Control states has been overwhelming.  In Oregon, where private agents’ contract with the Oregon Liquor Control Board (OLCB), Debbie Burke, Secretary of the Oregon Agency Liquor Stores Association reported that, “those choosing to be open on Sundays have had considerable success without taking sales away from previous normal business hours.”[3]

In Pennsylvania, Jonathon Newman, then Chairman of the Pennsylvania Liquor Control Board (PLCB) stated that Sunday sales had been a “grand slam home run” for the PLCB and that they had seen no “cannibalization” from other days of the week.[4] In Pennsylvania the PLCB is required to get legislative approval to increase the number of open stores.  Despite this legislative hurdle, the number of stores has been increased from the original 57 to 175.

Idaho allows Sunday sales by local option.  Initially, only private contract stores were open on Sundays.  However, seeing the success that these stores enjoyed, Dyke McNally, Superintendent of the Idaho State Liquor Dispensary, sought budget authority to open 12 state operated stores.[5]

Virginia Alcohol Beverage Control (VABC) initially opened 50 stores in July 2004.  However, in a careful analysis of the financial impact that these stores had VABC determined that Sunday sales at the initial 50 stores generated an average rate of return of 45% and that 90% of all sales represented new business.  As a result, in September 2007, the state opened 40 additional stores.[6]

In Washington State the legislature initially gave the Washington State Liquor Control Board (WSLCB) authority to open 20 state-run stores as part of a two year experiment. The WSLCB projected that these 20 stores would generate an additional $10 million in retail sales over 2005-06.  In fact, new sales were near $15 million. While many in the Washington legislature wanted to grant the WSLCB authority to open all state-run stores on Sunday a compromise was reached and funds were allocated to add an additional 29 state-run stores.[7]


D. 75% to 95% of retailers are open on Sundays when allowed in License States

In License States private entrepreneurs rightfully decide whether or not opening on Sundays makes sense for their business.  A package store next to a grocery store or located on a busy thoroughfare will jump at the chance to add an extra selling day to his week.  A retailer located in an office park or downtown area, however, might not see enough weekend foot traffic to make Sunday sales viable.  Estimates of Sunday sales participation rates range from 75% in New York to 95% in Massachusetts.

Table 4

Because of the heavy tourist’s areas in Delaware, initial participation rates are believed to have been over 80%[8] and current levels are over 90%.

New York initially implemented a 6-day optional play whereby retailers could choose to be open any six days of the week.  Days of operation had to be posted with the New York State Liquor Authority.  When retailers had to give up another day of the week to

open on Sundays 15% chose to be open on Sundays.[9] However, in 2004 the law

was changed and retailers were allowed to be open seven days if they desired.  Some 75% of retailers are now open on Sundays.[10]

II. Social Impact

A. Sunday sales provide necessary convenience for hard working two income families.

Sunday has become the second busiest shopping day of the week.[11] And, it is easy to see why.  In 2005 75% of mothers having children between the ages of 6 and 17 worked.[12] Additionally, 46% of all households had two income earners.  Since the two-income household has become the norm, rather than the exception for families it is important to give working couples all of the flexibility and convenience necessary to meet the demands of modern life.

B. Denying spirits the right to sell on Sundays is unscientific, risks promoting idea that beer and wine are not intoxicating.

The distinction between beer or wine and spirits is an artifact of a by-gone era.  Today, alcohol equivalency is taught by the Federal government, numerous public health organizations and state departments of transportation.[13] By maintaining an unscientific distinction between spirits and other beverage alcohol, states that restrict the sale of spirits while allowing beer and/or wine sales on Sundays risk promoting the idea that beer and wine are not intoxicating.

C. No evidence of underage drinking or drunken driving impact.

While added convenience is positive from a social perspective, some have voiced concern over potential negative impacts.  Before the nationwide campaign to increase the number of states allowing Sunday sale of distilled spirits was begun, a comparison of alcohol related social measures in States already allowing Sunday sales to those not allowing Sunday sales was conducted.[14] For each state, rates of alcohol related fatalities, under 21 alcohol related fatalities, 12-17 year old binge drinking rates and alcohol related mortality were collected.  Separate tests were conducted comparing rates in states allowing Sunday sale of spirits to those states prohibiting sale on Sundays.  The study found no evidence that allowing the sale of spirits on Sundays lead to higher levels of traffic fatalities, alcohol related mortality or underage drinking.

It is also important to track what has happened to underage drinking and alcohol related traffic fatalities in the states that began allowing Sunday sales of distilled spirits since 2002.[15]

Both underage drinking and alcohol related traffic fatalities will vary by state.  In addition, both will be impacted by national trends.  In order to account for state variations and national trends measures of how underage drinking and drunk driving fatalities deviated from national averages in both the period immediately prior to implementation of Sunday sales were analyzed.  2005 was the latest period for which data was available.  If deviation in a state declined (negative number), then the state improved compared to the national average.  If deviation increased (positive number) then the state’s performance got worse compared to national average.

In order to conclude that Sunday sales caused either underage drinking or drunken driving problems to worsen one would have to see a consistent pattern of increased deviation versus the national average.  If no such pattern exists, then one can reasonably conclude that Sunday sales did not impact underage drinking or drunk driving.

Figure 1 shows past 30 day use of alcohol among 12 to 17 year olds – one of the most common measurements of underage drinking.  Overall, the rate declined in 8 out of 11 states.  Thus, there is no consistent pattern of increased underage drinking and no evidence that Sunday sales caused an increase in underage drinking.

Figure 1

Another concern with regard to underage drinking is the quantities being consumed.  Figure 2 compares the deviation in the incidence of 12 to 17 year olds consuming five or more drinks on a drinking occasion in the past 30 days.

Figure 2

The level of binge drinking decreased slightly in six states, but increased slightly in five states.  Much of the deviation is so small that, statistically, there is no real change.[16]

Figure 3 compares the level of alcohol related traffic fatalities.  In five states the accident deviation measure decreased, in five it increased and in one state there was no change.  It should be noted that even though there is deviation from the national average, the level of deviation is consistently +/- 1 point or less.

Figure 3

Figure 4 compares the level of deviation in drunken driving fatalities (instances where the driver had a BAC of 0.08 or above).  Again, five states recorded an increase versus the national average, five states recorded declines and one state saw no change versus the national average.  As was the case with alcohol related fatalities, in no state was the deviation greater that +/- 1 point.

Figure 4

Both the underage drinking and drunken driving variables that analyzed showed the random pattern one would expect if there were no policy change in any of the states; in some states deviation was positive, in others it was negative.  Because of the random deviation pattern found across the states and the very limited range in which the measured deviation moved (both positive and negative), it can be concluded that Sunday sale of distilled spirits has had no negative social impact.


Conclusion

Sunday sales of distilled spirits have been a commercial success in each of the states that have recently allowed package stores to be open on Sunday.  In 2006 retail revenues were $212 million that they otherwise would have been.  These gains have come despite the fact that many states have implemented Sunday sales slowly.  In the states in which the most accurate data is available retail volumes have increased an average of 4.4% with only 31% of stores open – a minimum increase of 9% if projected statewide.

Perhaps the most impressive endorsement of Sunday sales has come in the Control States.  In many of these states even after Sunday openings have been approved by the State legislature new legislation must be passed in order to increase the number of stores open.

In addition to being a commercial success, Sunday sales has made purchasing spirits more convenient for two-income families who, to purchase distilled spirits, would otherwise have to find time on busy Saturdays, or shop after a long day at work.

An earlier analysis of the impact of Sunday sales showed that states allowing Sunday sale of distilled spirits prior to 2002 had rates of underage drinking and drunk driving that were no higher that states that did not allow Sunday sales.  An analysis of states that recently adopted Sunday sales showed a random pattern across states in underage drinking and drunken driving levels that indicate Sunday sales have had no negative social impact.

New retail sales.  No worsening of social problems.  States allowing Sunday sales of distilled spirits have met with both commercial and social success.


[1] See, Stehr, Mark. “The Effect of Sunday Sales Bans and Excise Taxes on Drinking and Cross–Border Shopping for Alcoholic Beverages,” National Tax Journal, March 2007, Vol. LX, No. 1. Stehr analyzes total state volumes (on and off premise) and finds a volume impact of between 4% and 6% from Sunday sales.  Translated into off-premise impact only, these numbers imply a volume impact of between 5.3% and 8.0% for package stores.

[2] Control State structures vary by state.  While all Control States act as the wholesaler, some will contract with private agents to act as retailers.  These private agents typically are paid some percentage of gross sales and, thus, do benefit from additional sales.

[3] Debbie Burk testimony before the Washington State Liquor Control Board (WSLCB),  Senate Ways and Means Committee and House Commerce and Labor Committee, March 4, 2003.

[4] Jonathon Newman testimony before Pennsylvania House Liquor Committee.

[5] “Sunday liquor sales bubbling: Head of dispensary wants to include more areas,” Spokesman Review, February 3, 2005.

[6] “Additional Stores in Eligible Areas to Open on Sundays,” ABC Bulletin, Virginia Alcoholic Beverage Control, August 8, 2007

[7] “Washington Senate toasts Sunday liquor sales: double anyone?,” The Seattle Times

[8] Conversation with David Trone of Total Beverage.

[9] Derived from New York State Liquor Authority records.

[10] Steve Glamuzina, President of the Empire State Package Store Association.

[11] A.C. Nielsen study of household shopping habits.  In some studies Sunday is now the busiest shopping day.

[12] Cohany, Sharon R. and Sok, Emy, “Trends in Labor Force Participation of Married Mothers of Infants,” Monthly Labor Review, February, 2007.

[13] See for example, the National Institute on Alcohol Abuse and Alcoholism, the U.S. Departments of Transportation, Education and Health and Human Services, the National Consumers League and Mothers Against Drunk Drivers.

[14] “Impact of Sunday Sale of Distilled Spirits on Various Social Measures,” Distilled Spirits Council of the United States, October, 2002.

[15] With the exception of alcohol related traffic fatalities, other causes of alcohol related mortality usually take years to change.  Thus, an analysis of overall alcohol related mortality would not be meaningful.

[16] While the level of statistical significance will vary by measure, a variation of 2 points or less would usually be statistically insignificant.

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