LCBO / The Beer Store

[Northern Light]

From what I heard - LCBO stores were stocking/starting to hoard product before the strike. I believe all orders became a disaster/delayed because of the rumoured strike/increase stock of product before the long weekend.

32 stores that are set to open to the public on weekends only starting next week would have seen their orders bloated, a smattering of additional stores aimed at serving licensees the same.

I wouldn't imagine they would have bloated stock all that much at other stores which they intend to keep closed, just a gentle bump to deal with any stocking up.

 

[Smoke2011]

32 stores that are set to open to the public on weekends only starting next week would have seen their orders bloated, a smattering of additional stores aimed at serving licensees the same.

I wouldn't imagine they would have bloated stock all that much at other stores which they intend to keep closed, just a gentle bump to deal with any stocking up.

I work for a gorcery store that has a license to sell beer and wine. When the No Board Report was annoouced we tried to stock up as much as we could. Yes the LCBO did put themselves first. Our order was delayed three times and had up to 80% of the items were shorted. I don't know what the invenotry level is at the LCBO but with them only shipping full skids of products, I don't see stores bring much out outside maybe the top two-three skus per catergory.

Personally I think the longer that this goes on, the case to keep the LCBO as a reatiler get weaker. Ford should of waited for the Masterwork Agreement expired but since we are past that I think that there a good balance of convenience consumer convenience and keeping the LCBO viable. Convenience stores will have a hard time with this. Not only will they have to give up shelf space from Monster and Coke etc. as these stores werent built with beer in mind they will have to be semi-competive on price. The 10% discount on wholesale which is much better than it is now doesn't give much room. Will someone pay double for a Old Pilsner. Dealing with shrink as well. I preidct that many will stop within a year.

Also some Ontario breweries and wineries that are using LCBO for shipping are now going direct with stores.

 

[Northern Light]

. Convenience stores will have a hard time with this. Not only will they have to give up shelf space from Monster and Coke etc. as these stores werent built with beer in mind they will have to be semi-competive on price. The 10% discount on wholesale which is much better than it is now doesn't give much room. Will someone pay double for a Old Pilsner. Dealing with shrink as well. I preidct that many will stop within a year.

No question this is an issue........but I'd place my bets a bit differently, I lean to an increase in the assignee discount to at least 15% in order to provide margin. I also think there may be some other tweaks, in addition to allowing domestics to by-pass the LCBO as wholesaler and sell direct to convenience stores, and in that context I expect pricing may be more attractive than said discount.

Its also my understanding that Ontario is considering allowing private label wines (Costco does this in the U.S. and in many other countries private-label wine represents as much as 1/3 of the market). Should that happen, aside from PC Wine, PC Black Label Wine, Panache Wine, and Irresistible Wine.... I would expect to see a house brand for Circle K. Done as an exclusive, they bypass the LCBO entirely and set their own price.

 

[just east of the creek]

No question this is an issue........but I'd place my bets a bit differently, I lean to an increase in the assignee discount to at least 15% in order to provide margin. I also think there may be some other tweaks, in addition to allowing domestics to by-pass the LCBO as wholesaler and sell direct to convenience stores, and in that context I expect pricing may be more attractive than said discount.

Its also my understanding that Ontario is considering allowing private label wines (Costco does this in the U.S. and in many other countries private-label wine represents as much as 1/3 of the market). Should that happen, aside from PC Wine, PC Black Label Wine, Panache Wine, and Irresistible Wine.... I would expect to see a house brand for Circle K. Done as an exclusive, they bypass the LCBO entirely and set their own price.

If domestics can bypass the lcbo and sell directly, unless other regulations preclude it, we may finally see “Buck a Beer”?

And secondly, with private label wines, are we really not just thinking of the same concept as we see in neighbourhood grocery stores now, with their wine outlets?

 

[Northern Light]

If domestics can bypass the lcbo and sell directly, unless other regulations preclude it, we may finally see “Buck a Beer”?

No. Excise Taxes on beer in Ontario/Canada are quite high, even w/o the LCBO mark-up there is no way you're getting even a two-four close to that price range.

A low end beer in the Beer store is ~$49 for a two-four or just over $2 per beer.

Wider sales and removal of the 'thou shalt not under cut the LCBO rule' may see some special promo-pricing (loss leader)........but I'd see that as maybe $39.99 at a push. To get it lower they'd have to reduce the excise tax.

And secondly, with private label wines, are we really not just thinking of the same concept as we see in neighbourhood grocery stores now, with their wine outlets?

No. There is no private label wine in Ontario today. You can't buy Costco's Kirkland Lake Wine, nor a PC one.

The wine sales in supermarkets are either just general retail licenses or they are units of 'The Wine Shop' or 'Wine Rack' using their licenses to sell the same product, generally, that you could get at LCBO. (Though Wine Shop/Rack are winery-owned, and certainly do have their own wineries, including product aimed at the cost-conscious, but you won't see any wine branded as 'Wine Rack'.)

 

[torontowest91]

i wish we had kirkland wine

 

[Northern Light]

Uptake of the licenses to sell booze by convenience stores has been decent (~3,000).......but so far less than 40 supermarkets have been added in the entire province, a mere 2 in the City of Toronto.

https://www.cbc.ca/news/canada/toronto/ontario-alcohol-beer-wine-grovery-store-supermarket-sales-1.7261181

The sticky bit appears to be the requirement to do returns.

I suspect the government will have to pay retailers to do returns in some fashion (as it does the beer store), waive the requirement, at least in the near term, or steepen the assignee discount.

i don't think its that big an ask; but one has to remember the assignee discount is only 10%, meaning retailers are paying 90% of retail to buy wine/beer/mixed drinks. At that number there is next to no margin for profit at all. So having to take on
an added cost with so little incentive is creating an issue.

Note that the higher uptake by convenience stores appears related to the fact they will not be required to take returns.

 

[Admiral Beez]

I guess I don’t drink enough to care. When word of the impending strike came I walked over to my local LCBO and bought four bottles of red wine and two cans of beer. That was, what two weeks ago now? I’ve drunk one beer and one bottle of wine. I’m much more a lemon water or home made, unsweetened ice tea on the porch chap. I find the older I get the more I resist buying anything.

 

[max]

Uptake of the licenses to sell booze by convenience stores has been decent (~3,000).......but so far less than 40 supermarkets have been added in the entire province, a mere 2 in the City of Toronto.

https://www.cbc.ca/news/canada/toronto/ontario-alcohol-beer-wine-grovery-store-supermarket-sales-1.7261181

The sticky bit appears to be the requirement to do returns.

I suspect the government will have to pay retailers to do returns in some fashion (as it does the beer store), waive the requirement, at least in the near term, or steepen the assignee discount.

i don't think its that big an ask; but one has to remember the assignee discount is only 10%, meaning retailers are paying 90% of retail to buy wine/beer/mixed drinks. At that number there is next to no margin for profit at all. So having to take on
an added cost with so little incentive is creating an issue.

Note that the higher uptake by convenience stores appears related to the fact they will not be required to take returns.

If deposits had all been done when beer & wine were initially rolled out to the grocers they likely would have jumped at the chance to put in the bottle return infrastructure. However, now that they've had some experience and a few have even removed booze sales from some stores they are understandably more wary to apply for all the reasons you say.

Also, the government seems to have a big chunk of money to pay to the Beer Store to change things, if this is such a big priority for then maybe there's more money in it for the grocers? On that note, I'd be very curious to see who the newly applying supermarkets are and if certain chains have made a corporate decision to stay out.

 

[lenaitch]

Uptake of the licenses to sell booze by convenience stores has been decent (~3,000).......but so far less than 40 supermarkets have been added in the entire province, a mere 2 in the City of Toronto.

https://www.cbc.ca/news/canada/toronto/ontario-alcohol-beer-wine-grovery-store-supermarket-sales-1.7261181

The sticky bit appears to be the requirement to do returns.

I suspect the government will have to pay retailers to do returns in some fashion (as it does the beer store), waive the requirement, at least in the near term, or steepen the assignee discount.

i don't think its that big an ask; but one has to remember the assignee discount is only 10%, meaning retailers are paying 90% of retail to buy wine/beer/mixed drinks. At that number there is next to no margin for profit at all. So having to take on
an added cost with so little incentive is creating an issue.

Note that the higher uptake by convenience stores appears related to the fact they will not be required to take returns.

We knew the folks that ran the Foodland where we used to live and they treated booze sales like Lotto - lost leaders, and they had to sacrifice some product lines and/or size choice to free up floor space. I can't imagine many stores having the space to handle returns let alone staff to deal with it. Their 'express desk already deals with post office, lottery, carpet cleaner rentals, etc.

 

[Northern Light]

We knew the folks that ran the Foodland where we used to live and they treated booze sales like Lotto - lost leaders, and they had to sacrifice some product lines and/or size choice to free up floor space. I can't imagine many stores having the space to handle returns let alone staff to deal with it. Their 'express desk already deals with post office, lottery, carpet cleaner rentals, etc.

In a province where most people have the 'blue box' I don't really get the point of returns unless its for the purpose of re-use.

That i get. But that requires a much different regime than we have today for managing bottles and standard shapes and sizes etc. I don't see that happening, at least in the near term, so I'd be fine to see them chuck the idea.

 

[lenaitch]

In a province where most people have the 'blue box' I don't really get the point of returns unless its for the purpose of re-use.

That i get. But that requires a much different regime than we have today for managing bottles and standard shapes and sizes etc. I don't see that happening, at least in the near term, so I'd be fine to see them chuck the idea.

Some people view deposit-return as used in other jurisdictions as the holy grail to increase recycling. I could see deposit-return when every bottle of beer was sold in stubbies back in the day, or even when they moved to the standardized 'tall' bottle, but there are so many exceptions, bespoke bottles, etc. it must be an absolute pain, unless they plan to go to a 2-stage return system where the grocery store, et al, just ship everything off to be sorted, which doesn't sound very efficient. I go through so few that they simply go into the blue bin - I'm not saving them up.

Another aspect is licenced premises, resorts, etc., particularly in cottage country. I'm sure the local grocery store would be thrilled to have the vans back up to the door after a summer weekend.

 

[Smoke2011]

I would be intrested to see the details on how it will work. Does the store need to proivde the containers/boxes to store the emptires. Who will be picking it up and how often. My thought would be The Beer Store does it when they deliver like they do with bars. Also both sides will bulk at the expense for it. Even with the 10% discount on wholeslae, it will still be hard for a store to turn a profit unless they want to go higher in price than the LCBO. Also why isn't the LCBO forced to take back returns.

On the strike front, stores that are trying to bring in product by the skid are not getting their orders and communitcation isn't the best. I have hard that even their vendors arent getting the information they need.