11-10-1986 Council Packet - Laserfiche WebLink

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1'Mark ilc�rnharfh;on, CiLy hrlminiaLral-Ort. DATE: Decei.iber S, 1935 SUBJEXT: Liquor Store OperaLions/Strategic BusinesJ Plan 1986 Attached please find business strategy plan that has been developed by Lorraine McGowan, Tom Kuehn and myself as a means to improve the current liquor store operation. As you may be aware Lorraine engaged the services of Lynn Griffith with Minnesota Municipal Liquor Association to suggest changes last year to improve business. One of the changes suggested was to offer discounts on selected items as a means to attract business and it was indicated to Lorraine at the time that it would take approximately a year for this to actually be reflected in an upturn in sales. This was commenced back in April and it will still be another 3 to 4 months before we expect to see - significant results from this move. The two most significant items that we will be undertaking in this strategy plan is a significant reduction in personal service costs so that over the next. 2 years we will be able to get those costs to an acceptable percentage of sales for our size of operation. The second is that we will be specifically attempting to reduce the inventory size in order to free up money for investment income. Lorraine McGowan is presently working with current employees to arrange these reductions through projection of hours and other means appropriate to reduce overall personnel costs. Yet at the same time work to provide the appropriate customer service that is needed in order for the boutique wines style of operation to be effective. Should we sustain a loss this year and are unable to show a profit next year the City will be required to put the question of whether we should continue in the municipal liquor business off sale -.-) a vote. It would be my recommendation that if we are not able to show a profit in 1986 that Council liquidate the operation and save the cost and expense of a public vote. RECOMMENDATION - It is recommended that the City of Orono continue its liquor operation for the year 1986 taking the appropriate actions in an attempt to turn it around and that should the operation in 1986 show not only increased sales of at least 102 but a net profit with investment income of $10,003 that the City then make a conscious decision to get out of the business and that we look first to see if the current employees are interested in taking over the operation and absent that look to liquidate it in some other manner. Should you have any other questions or comments, please feel free to contact me. PROPOSED MOTION - Moved by , seconded by , that the Council take under advisement the inFo-rmation given by staff and that the item be placed on the agenda for January 13, 1986, discussion. Ayes , Nays ec: Tom Kuehn and Lorraine Mc -Cowan