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82086.3 <br />TO: Mayor -nd City Council <br />FROM: Mark b-rnhardson, City Administrator <br />DATE: August 20, 1986 <br />SUBJECT: Liquor Store Performance <br />Attached is a copy of the memo that you received last time <br />regarding performance of the Liquor store through the end of June <br />1986. Based on the July estimates in which the store did $55,000 <br />of gross sales, it is anticipated that operation broke even at <br />the end of July for the year. The store has done an excellent <br />job in trying to trim expenses particularly the personnel area. <br />However, savings in this area have somewhat been offset by <br />"extraordinary expenses" from last year ($1,600 in legal <br />expenses) together with insurance expenses which doubled from <br />198E Based on the discounts and markups, the needed gross sales <br />to support the expenses on a monthly basis equal $38,000. Below <br />are results from previous three ye,.rs together with targeted <br />results in the business plan and presently expected results. <br />Target 'F6 <br />Expected f, <br />1983 <br />1984 <br />19.,5 <br />(12/85) <br />(8 86) <br />August <br />$47,400 <br />$42,800 <br />$48,500 <br />$48,000 <br />$50,000 --f" <br />September <br />38,200 <br />31,300 <br />35,400 <br />38,000 <br />36,000 <br />October <br />35,900 <br />30,900 <br />34,600 <br />38,000 <br />35,000 <br />November <br />33,300 <br />30,900 <br />37,800 <br />40,000 <br />38,000 <br />December <br />50,333 <br />44,800 <br />46,400 <br />52,000 <br />50,000 <br />I <br />Yearly Net Income <br />$17,500 <br />$ 5,400 <br />($ 8,900) <br />$ 9,900 <br />$ 61000 <br />It is of note of the first six months operation net income for <br />the Mound store which has considerably larger volume of business <br />has been down markedly from 22,140 to 6,177 in 1986. They <br />attribute this in part to the competition of the Liquor Basket <br />that went in last summer in Spring Park. This apparently has not <br />had an appreciable effect on the Orono operation and the store <br />reorganization and cleanup together with the reduction expenses <br />have aided in improving Orono's picture over last year. <br />RECOMMENDATION - It is rec,mmended that since the 3rd querter is <br />ant.:ipated to be profitable that the City look to October report <br />to see if the revised results are met together with a outline <br />for store sale. <br />