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Jamiary 30, 1981 <br />page 2 <br />Lexington Store This store was closed in June 1980 becau e that was the time <br />of expiration of the lease. It concluded the year with a $13,900 loss. The <br />loss was greater tbari anticipated because of the allocation of administrative <br />costs was greater than anticipated. <br />Har Mar Store This store completed 1980 with a$143,311. or 25% i=ease in <br />2 <br />gross sales. The sam percentage increase was mq>erienced in 1979. The <br />I F <br />a.ncrease az attributed to increased priLces (approximately $50,000 - $55,000), <br />and custamrs fran Hamline and Lexingtm Stores (aloproxiTretely $93,000 - $98yOOO) <br />Net profit fran operations in the Har Mar Store increased to $73,957 in 1980, <br />This represents a $28,,794 or 63% increase in net income,, The average net <br />a.nccm as a percent of sales for the 85 numcipal off sale stores in esoi---,J <br />in 1979 was 7.6%. The Har Mar Store for 1980 has net income equal to 10A <br />percent of sales. I <br />It appears that there has been substantial i'mprovemmt in the financial operations <br />a <br />.tf the n=3_cipal liquor store, and concluded the year 1960 in a atively <br />strong position. <br />A year ago it was projected -the to net operating profit wDuld be in the range <br />of $43,000 - $48,000 for 1980, a $75,000 • $90,000 net profit by 1981 or <br />1982, The actual net profit in 1980 was $59,985 or app tely $12,000 cver <br />V <br />proDections. <br />The store has increased its operating reserve as a result of reduced inventory 0 <br />0 mients and the showing of profits for 1978, 1979 and 1980. This fact plul <br />reqL= <br />the favorable projections for 3-981 provide the City with an additional reserve <br />to deal with not only the 1980-81 state reductions, but wbat may happen as <br />'It of the 1981-82 state aid legislation. <br />.a resu <br />Notwithstanding the uncertainity of state aids or -the philosophical question of <br />whether the City should be in the off-sale liquor operation, the prospect of the <br />operation again providing a significant and continuing revenue contribution n-ay <br />be som ret=ming. <br />It is reccmTended that the City continue its nmnpal off-sale liquor operation <br />at the Har Mar Shopping Center. If the Council decides a year fran this time to <br />get out of the liquor business, the lease agreenxmt obligation w=ld be approximately <br />$7,0001D <br />Attachment - 1980 Liquor Report <br />1/30/81 <br />