With a combination of rising inventory costs, changing customer preferences, and other factors, running a profitable liquor business can be a real challenge.
While you can’t control many of the shakeups in the economy or the liquor industry as a whole, there is one area you can still work on to improve your profit margins: operating costs.
Reducing your liquor store’s operating expenses is essential to keeping customers and employees happy, reducing waste, and maintaining healthy cash flow.
In this article, we’ll give you an overview of some of the top financial challenges liquor stores face, along with eight practical tips and tools you can use to reduce expenses while improving the customer experience.
Let’s dive in.
Every retail business faces operating expenses like rent and utilities, but liquor stores have a few unique challenges that generic retail doesn’t, like:
These are some of the reasons why the ongoing cost of running a liquor store is around $27,000 a month.
Reducing operating costs is essential to improving your profit margins — but where do you start?
Here are eight cost-effective and practical ways to reduce your liquor store operating costs.
One of the highest costs for a liquor store is labor. Other industries might just send staff home when things are light, but many liquor stores can’t — either out of concern for store security, because there’s plenty of back office tasks to do, or in some rare cases, because liquor store employees have to be licensed.
Great liquor store employees are crucial to keeping things running smoothly and creating a welcoming atmosphere — and despite rising labor costs, the answer is not to pay them less.
Instead, help your employees do more by using your point of sale (POS) to reduce unnecessary admin and labor, or even automate certain tasks.
With a modern POS system, your employees can:
While some of these options are only on industry-specific POS solutions, many may be available to you already. Contact your vendor today to find out how to take full advantage of your system.
For the average liquor store, inventory is easily the highest ongoing expense. Having to update and track stock levels, write out purchase orders, and do manual inventory counts can be a huge time sink.
Leveraging inventory management software is pivotal to optimizing your stock levels, improving staffing, and making better business decisions. Liquor store inventory management software updates stock in real time every time you make a sale. Specialty systems can also integrate with suppliers to update your total stock levels within a day of receiving an invoice.
These features alone make inventory management tools worth the investment, but they also come with other time and money-saving features, like:
Better visibility helps you get an unbiased view of how different parts of the store are performing, so you can keep on top of your stock without manually walking the aisles or checking the stockroom.
Store security is a top priority for many liquor store owners, but it’s not exactly cheap. In addition to low-cost security tips like adjusting your store layout to be more visible and installing mirrors, there are a few ways to cut down on costs by using integrated security systems.
What do we mean by integrated? Essentially, instead of using one system to run your security systems and another to oversee your employees and business, integrated systems let you do everything from one place.
An integrated system has several other advantages besides just lowering costs, including:
Having a connected system cuts down on the time and effort it takes to monitor store security, while also linking your security with other important store systems.
Most liquor stores have a wall of standing fridges to sell white wine, cold beer, canned cocktails, or seltzers. However, for many liquor stores, cleaning and maintaining refrigerators isn’t a high priority.
It should be — cracked and damaged seals or dirty cooling coils can drive up energy costs and reduce the life of your equipment.
Regularly empty and clean out refrigerators, taking extra care to clean the cooling coil at the back of the unit.
A dirty refrigerator coil (Image source: HomeServe)
While you’re at it, look for any damaged rubber door seals and listen for any unusual noises. Remember: Performing regular maintenance on these items is cheaper than replacing the unit.
To make sure this important job doesn’t fall through the cracks, use your POS system to schedule a weekly or monthly task that automatically alerts employees at the cashier stand or via text message.
Related Read: Liquor Store POS Hardware: 5 Essentials Tools (+ Top Providers)
While it’s important to maintain a varied stock, your customers’ interest in certain drinks will change throughout the year. Many stores see spikes in sales of stouts and brown ales in the winter, tequila and gin in the summer, and other seasonal shifts — but every store is a little different.
Failing to account for these changes can have you wasting money on dead stock that no one is in the mood to drink. Instead, use the sales reports on your POS system for demand forecasting to spot how sales of certain items change in relation to:
Inventory forecasting isn’t 100% accurate, but it goes a long way towards helping you reduce unnecessary purchases and stockouts.
Investing in marketing is a must for small liquor stores — it gives store owners the opportunity to showcase their products, put a human face on the business, and attract both new and existing customers with the promise of a good deal.
While marketing is an essential operating expense for your liquor store, it’s important to find ways to maximize your return on investment. After all, there’s no point investing heavily in a marketing strategy that doesn’t work.
Here are a few ways you can use the reports on your POS system to measure marketing success:
By taking an unbiased view of the results of a marketing campaign, you can learn what strategies resonate with your customers and which fell flat, helping you make more impactful investments moving forward.
Related Read: 8 Ways To Build Your Liquor Store's Online Presence
In 2025, the White House put sweeping (and often changing) import tariffs on foreign products, with other governments retaliating with tariffs of their own. The tariff situation is constantly changing, with some tariffs suspended and others changing terms shortly after being announced.
If your head is spinning trying to keep up with the on-again, off-again tariff situation, just imagine what it’s like as a supplier selling imported alcohol or a producer selling their products to foreign markets.
While it’s still early to know what impact these new tariffs will have, historically speaking, sales have dropped significantly on tariffed goods, and prices are likely to rise for both retailers and producers.
This means that many U.S. brewers and distillers are facing losses and are open to making deals with local liquor stores. In other words, now is a good time to start forming relationships with local producers. At the very least, try to include more U.S.-based products in your liquor merchandising plan to avoid the extra markup on foreign bottles.
Not only is it more economically sound, but having a larger selection of local products will help differentiate your store from the bigger competition. If you can prove there’s a demand for these products, you could also try to negotiate store-specific bottle releases and better rates down the line.
Like it or not, businesses that sell alcohol and other age-restricted products are considered “high-risk”. That means to take modern payment methods like credit cards and contactless payments, liquor stores have to work with high-risk payment processors, who generally charge higher fees and may hold onto funds longer than a normal payment processor would.
With the vast majority of today’s customers paying by card, these small fees can add up. Working with industry-specific POS systems can help reduce these costs, as many of them (including Bottle POS) handle high-risk processing in house.
In-house processing ensures that payment processing fees are kept to a minimum, and you’ll be able to use the same processor for your in-store and online sales.
If you still have many cash-paying customers, finding a POS system with dual pricing allows you to pass the savings of cash transactions directly to your customers.
Many aspects of liquor retail are out of your control. Rising costs. Unpredictable tariffs. Changing demographics.
One thing that is in your control? Your technology partner. Choosing the right liquor store system is at the heart of reducing manual labor, finding cost-cutting opportunities, and improving the customer experience.
Bottle POS is one of the only systems on the market specifically designed with liquor stores in mind. With simplified inventory management, advanced reporting and analytics, employee management, and other industry-specific tools, Bottle POS gives you everything you need to reduce your expenses without sacrificing the customer experience.
Try our Build and Price tool today to create your perfect POS system.