Ontario liquor sales hit record $4.1 billion
A preference for higher-priced wines and other drinks helped the Liquor Control Board of Ontario put a $1.35 billion "dividend" in the province’s pocket, but bad weather, high gas prices and better deals south of the border kept some shoppers away from Ontario liquor stores.
LCBO sales rose 5.5 per cent to a record $4.1 billion for the year ending March 31 as consumers continued to "trade up" to more expensive brands, the provincially owned agency noted in its annual statement. Still, it was the government-owned liquor chain’s second-slowest rate of growth in sales in eight years.
"It was a relatively strong year despite concerns over high gas prices and economic conditions south of the border," Bob Peters, LCBO president and chief executive, said yesterday.
"The harsh winter also resulted in some slower days than expected during the holiday season."
LCBO sales growth topped the average of other retailers, whose sales grew just 3.5 per cent over the same period, agency spokesperson Chris Layton said.
The rise in the value of the Canadian dollar against its U.S. counterpart had some impact on sales but it was limited to border stores as fewer Americans headed north to shop, Layton said.
As the Canadian dollar rose sharply last fall to reach parity with the U.S. greenback, many Canadian consumers complained that Canadian retailers, including the LCBO, were still charging noticeably higher prices. And more Canadians crossed the border in search of better deals on everything from cars to clothes.
Layton said the trend had a limited impact on the liquor stores’ sales. In response to the rising dollar, the agency and some of its suppliers cut prices on some imported products, he added.
As sales grew at a slower pace, so did profits, according to the LCBO’s historic data.
The retailer said yesterday it earned $1.37 billion, out of which it paid a $1.345 billion dividend to the provincial government http://paydayintime.com. That’s up 5.1 per cent compared with last year. The previous year, the dividend grew 6.4 per cent. The government uses the funds to help pay for various programs, from health care to roads.
Still, this year’s sales and profit both set records for the 14th year in a row partly because "consumers continued to trade up to more premium brands," Peters said.
Strongly performing categories included:
Vintages products, up more than 13 per cent to $300 million.
Beer and ready-to-drink products, up 8 per cent to $990 million, including Ontario craft beers up 37 per cent and cocktails-to-go up 35.3 per cent.
Wine sales up almost 6 per cent to $1.41 billion
Ontario VQA table wine sales up 11.8 per cent; total Ontario winery sales up 6.2 per cent; imported wines up 5.9 per cent.
Red wines up 6.6 per cent; whites up 6.4 per cent.
Wines priced $15 to $20 a bottle topped all price bands in growth, up 19.3 per cent.
Vodka led all major spirits segments, up 9 per cent. (On a smaller base, Tequila rose 12.3 per cent.)
LCBO gift-card sales rose 20.7 per cent.
The LCBO opened five new stores and upgraded 12 stores in 2007-08 to expand product selection.
The agency’s results were outlined in a two-page news release. The LCBO’s annual report isn’t pubished until the fall.
Filed under: news by Pascal