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Interview: Stephen Bebis, President And CEO, Liquor Stores N.A.

April 25, 2016

Canada-based retailer Liquor Stores N.A. operates more than 200 stores throughout Alberta and British Columbia, but lately the company has been raising its profile in the U.S., where sales increased 4% to $170 million in 2015. Liquor Stores N.A. operates 23 locations under the Brown Jug brand in Alaska, as well as 15 stores in Kentucky under its Liquor Barn banner. Last November, the company entered New Jersey by acquiring two Joe Canal’s Discount Liquor Outlets, and it plans to make landfall in Massachusetts and Connecticut later this year. SND associate editor Christina Jelski recently spoke with Liquor Stores N.A. president and CEO Stephen Bebis to discuss the retailer’s U.S. growth strategy.

SND: How are retail conditions across your U.S. markets?

Bebis: We just entered New Jersey, and our president there, Mark Hutchinson, who came with the Joe Canal’s business, is doing a great job. Our stores in Kentucky have also been very successful. We opened three big-box superstores in Kentucky in the last year, featuring a whole new prototype and look. In Alaska we’re remodeling, and we opened one new store there last year. But the Alaska economy has been difficult, mainly because of the impact of the oil industry.

SND: What are the main challenges to your U.S. push, and how are you approaching them?

Bebis: There’s a lot of competition, and there are some great retailers in the U.S., so we’re going to be very careful about how we grow, making sure it’s very modest and strategic. We’ve built our company on acquisitions—Liquor Barn, Brown Jug, Joe Canal’s—and we’d like to buy more. When we can’t find acquisitions that fit, we’ll set up in a measured way in pockets where we think we can be successful.

SND: What trends are you monitoring in terms of categories and customer behavior?

Bebis: Obviously brown spirits are selling well, particularly in our Kentucky market. We’re in the heart of Bourbon territory, so when we release products like Pappy Van Winkle we have lineups at our stores for hours. We’re also seeing things like delivery and e-commerce continue to grow. Digital is still a small percentage of our business, but the digital world is moving faster than the brick-and-mortar world, and it’s increasing in importance.

SND: Canada still accounts for more than 70% of Liquor Stores N.A.’s sales. How are things going there?

Bebis: Like in Alaska, oil is also down in Alberta, where we have most of our stores. We’re in a deep recession there and unemployment has doubled in the last year. We have markets that were once 80,000 people and are now 40,000 people. If you have 10 stores in a market like that, it’s challenging. We’re recession-resistant, but we’re not recession-proof. Expansion into the U.S. is important so that we can diversify. But we’re not going to do it quickly. We’ll take our time and do it right.

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