The Beer Store Reports More Than $50 Million Loss in 2020
On April 8, 2021 At 10:00 am
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TORONTO, ON – The Beer Store, the Ontario retail chain majority owned by Molson Coors and Labatt/AB InBev, has reported an operating loss of $50.7 million for the year 2020, a jump from $46.5 million in 2019, and $18.1 million in 2018.
The retailer has also seen a drop in operating revenue, which was at $399.4 million in 2020, down from $402.2 million in 2019, and $418.9 million in 2018.
These changes can likely be attributed to growing competition in the province’s beer retail market, including grocery stores which have been selling beer since 2015, and takeaway sales at restaurants and bars which started as a temporary measure early in the COVID-19 pandemic before recently becoming permanent.
Business experts tell the Toronto Star that these losses may signal the end of the Beer Store in its current form:
That level of red ink raises questions about The Beer Store’s long-term future, says Matt Sooy, an assistant professor of managerial accounting at Western University’s Ivey School of Business.
“There’s only so long you can lose $50 million a year. It’s not sustainable, even in the short term,” said Sooy. “A $50 million loss isn’t anything to celebrate.”
Retail analyst Lisa Hutcheson said The Beer Store’s retail model is antiquated and doesn’t hold much allure for shoppers.
“Now that the grocery stores can sell beer, and the LCBO sells beer, wine and spirits, why make the extra stop at The Beer Store when you can just buy beer with your other purchases?” said Hutcheson, managing director at retail consultancy J.C. Williams Group.
For more details, see the full financial statements.
Source: Toronto Star