The recession has taken a toll on liquor sales at the ABC stores in Maggie Valley and Waynesville, in turn reducing the profits paid out to the towns.
Rather than curtailing their intake, customers are buying cheaper brands, according to Joy Rasmus, manager of the Waynesville ABC store.
“It is an easy thing to cut back on. It is a luxury item,” Rasmus said.
Meanwhile, fewer tourists during the recession hurt sales at Maggie’s main ABC store. Austin Pendley, the chairman of the Maggie ABC board, cited “the lack of full motel rooms” as the main factor behind a drop in sales.
Maggie Valley’s ABC store has noticed a further decline in business following the rockslide on I-40, which closed part of the interstate and discouraged travel.
“We could tell an immediate difference,” Pendley said.
That said, the rockslide occurred just when the tourist season was winding down anyway, making it difficult to determine what can be blamed on the rockslide versus the standard drop off Maggie sees this time of year anyway.
“There are too many variables this year,” Pendley said, adding that sales will pick up again when ski season arrives in full force.
Maggie is also bracing for a potential loss in ABC revenue with the advent of liquor at Harrah’s Cherokee Casino and Hotel. The hotel at Harrah’s began selling alcohol in restaurants and bars this fall, with hopes of eventually offering it inside the casino itself.
Maggie’s ABC store had been a favorite stop for those en route to Harrah’s.
“It will definitely have an effect. There’s no doubt about that, but to what degree I do not know,” Pendley said.
Maggie’s ABC store did a brisk business in miniature airplane bottles, which gamblers would tuck into their pockets and purses before heading over the mountain to the casino.
If and when Harrah’s begins offering alcohol to gamblers on the casino floor, Pendley expects a drop off in sales of airplane bottles.
In a tactical move to grow revenues, Maggie Valley opened a second ABC store this year aimed at capturing business from Waynesville. Maggie’s second store is on the outer fringes of town — more than a mile outside the town proper. Maggie annexed a satellite tract into its town limits to strategically build a new store between Maggie and Waynesville on U.S. 19 in Dellwood.
“Building store number two has been very gratifying,” Pendley said.
The second store likely pulled some business away from Maggie’s existing ABC store.
“We knew some portion would be siphoned from store number one. We don’t know how much,” Pendley said, citing the myriad variables at play this year.
Since Maggie’s new store opened, revenue at Waynesville’s ABC profits have taken a dive (see chart). While Maggie ABC revenue has grown by an additional $30,000 to $50,000 a month since the opening of the new store, Waynesville’s has dropped by a comparable amount.
The drop in revenue came as no surprise to Joy Rasmus, the manager of the Waynesville ABC store.
“We were expecting an impact, but we didn’t know how much,” Rasmus said.
Waynesville once captured a large share of the liquor purchases in the county by default. Residents from the county’s outlying areas come to Waynesville for their grocery shopping. While in the neighborhood, they would stop by the ABC store.
But Maggie’s new store — stationed practically at Waynesville’s doorstep — is snagging a share of what Waynesville once got.
It’s particularly true for those making a special trip from places like Lake Junaluska and Jonathan Creek.
“If you were just coming to town to buy alcohol, it is easier to stop at Maggie’s new store,” Rasmus said.
In response, Waynesville’s ABC Board is contemplating a new store of its own: one in the vicinity of the new Super Wal-Mart. Super Wal-Mart pulls in a huge volume of traffic, which Rasmus would like to capitalize on.
The current ABC store in Waynesville has been there since 1967.
“Absolutely we’ve outgrown it,” Rasmus said.
The Waynesville ABC Board is keeping an eye out for property to build on in the Super Wal-Mart vicinity, but there’s nothing concrete in the works yet.
“In a perfect world, it would be nice to keep two stores,” Rasmus said.
Opening a new ABC store isn’t cheap, Pendley said. There’s the cost of land and construction, but there’s also start up costs like shelving and a computer system. The upfront inventory cost to stock the store was “overwhelming,” Pendley added.
“We had no idea that there was going to be a recession or we probably wouldn’t have done it at this time, but we were too far committed not to go ahead with it,” Pendley said of the second store.
But Pendley is glad they did. The second store has already proven lucrative and will continue to pay off for the town, which reaps the profits from ABC operations.
“The whole purpose is to get more revenue to keep down taxes,” Pendley said of their mission.