COVID-19 Helps Drive Restaurant Alcohol Sales Down Close to 20 Percent

Due in part to COVID-19, alcohol sales at restaurants and similar business decreased 19 percent in the 2020 fiscal year, according to a press release from the Virginia Alcoholic Beverage Control Authority (ABC). At the same time, total ABC revenue, including licensee sales, increased by $117 million, driven by an increase in retail sales.

From March to July, licensee alcohol sales, including restaurants, dropped from a normal 18 percent to a range from 0 – 10 percent. That’s a problem for the hospitality industry, since alcohol sales are a large part of their revenue.

“Typically a restaurant can do one-third alcohol, one-third beer, and one-third food sales. That’s not an uncommon ratio,” said Richmond-area restaurant owner Chris Smith. Restaurants can also boost net profit by selling alcohol. “You can have a higher margin on alcohol than food,” Smith said.

The ABC loosened restrictions to allow alcohol to be sold for take-out and delivery. It also loosened restrictions on outdoor seating.

“[The loosened restrictions] are not really effective. People don’t really want to buy to-go drinks, said Dustin Hughes. Hughes owns the Lockside Bar and Grill and the Vino Italian Bistro, both located on Battlefield Blvd in Chesapeake. He said, “If people want to drink at home, they’re going to buy it from the liquor store or from the grocery store where they pay a third of the price and can drink at home. It’s not effective, not for the restaurant business.”

Hughes’ restaurants have been hit harder than the rest of Virginia. Eastern Virginia is under COVID-19 rules preventing alcohol from being sold after 10 p.m. “You just don’t care as much about social distancing after you’ve had a couple of drinks. That’s when the virus gets spread,” Governor Ralph Northam said when he announced the restrictions, according to WAVY.com.

“Typically the busiest time for people to be out having a couple drinks, enjoying some live music was really between 10 and midnight,” Hughes said.

Smith said he doesn’t expect restaurant revenues to get back to normal until a COVID-19 vaccine is available. “I don’t think that all restaurants are going to make it that long without more government help.” Smith said even healthy restaurants are economically endangered.  He said, “There should be something specifically stimulus wise to help that industry.”

Hughes said opening bar seating would also help. “If they would allow us to seat our bars but still practice social distancing, we can put people at the bar six feet apart.” His restaurants have rearranged furniture and closed every other booth to keep people socially distanced. “If I had two couples sitting at a bar with six feet in between them, that achieves the same thing in my opinion,” Hughes said.

“The most effective thing for us is if they would allow us to stay open and sell alcohol and food until midnight, or even just go back to 2 a.m.,” Hughes said. He doesn’t know what to expect going forward.

“In Virginia it seems like they’re making more and more restrictions, not really loosening them up. Your guess is as good as mine on what’s next,” he said.

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Eric Burk is a reporter at The Virginia Star and the Star News Digital Network.  Email tips to [email protected].