Is Buying a BC Liquor Store License a Good Idea During Inflation or Recession?

Buying a liquor license isn’t a license to print money; however, if you’re going to take a chance on starting a new retail business during the present inflation or looming recession, private liquor stores have some built in advantages:

• Retail liquor stores have historically been recession proof and pandemic proof
• In Canada, alcohol sales have increased steadily each month for the past five years
• Liquor stores have often been declared an essential service
• Competition is limited by the number of licenses for sale in the province

From our vantage-point as BC liquor license consultants, buying a liquor store is  much “safer” than starting other forms of retail or another type of liquor businesses (i.e., restaurant, bar, pub, club).

Liquor Stores are Generally Recession Proof

During the “Great Recession” of 2007-2009, a Nielsen study revealed that half of 3500 survey participants said that “the current state of the economy does not impact the amount they are spending for beer, wine or spirits”. Danny Brager, then vice president, client service, beverage alcohol for Nielsen, said, “our research shows the economic slowdown is having only a modest impact on alcoholic beverage purchases” – Nielsen Find Alcohol Purchases Recession Proof”, Convenience Store News.

Alcohol Sales Continue to Increase in Canada

In Canada, monthly retail liquor store sales have increased steadily over the past five years, peaking in March 2020 as a result of pandemic panic buying. Liquor sales continue to increase post-pandemic. December 2021 liquor store sales were 2.21 billion, an increase of 60 million from December 2020 – Monthly retail sales of beer, wine and liquor, stores in Canada 2015 to 2021.”, Statista.

The trend toward premiumization (higher quality, more expensive products) started during the 2007-2009 recession. Premiumization was also a trend during COVID-19. Bart Watson, chief economist for the Brewers Association told NPR that, “If anything, the premiumization trends strengthened during the pandemic – “What Beer Sales Tell Us About the Recession”, NPR.

Liquor Stores are Essential Services

While mandates forced other businesses to close during the pandemic, BC liquor stores remained open because they were declared essential services. Although there were many challenges for private liquor store operators, liquor sales in BC skyrocketed, hitting a 20-year high. As reported by The Vancouver Sun, BC’s 1442 private liquor stores accounted for 55% of all liquor sales in the province from April 2020 – March 31, 2021.

You’ll Have to Stay on Top of Trends

If you do buy a liquor store in BC, one thing recessions and the pandemic have taught the industry is that while alcohol sales overall may be relatively stable during tough times (compared to other retailers), category popularity trends shift quickly and dramatically. Today, the hot categories are premium spirits, and ready-to-drink  beverages. However, there are some indications that liquor consumers are beginning to “trade down” to less costly products during the present inflation. Trading down, but still buying.

Buy a Liquor License or Liquor Store in BC?

If you’d like buy a liquor license or liquor store in BC, Thrive Liquor & Cannabis Advisors can help. We receive qualified leads and match motivated buyers and sellers.