Ale Yeah, Decatur GA

11% profit margin
3% rent increase per year
Paying wages that would be low-end at Walmart
.. on what is likely decreasing sales

I know this is one store in one city but this is a data point to show how tough beer store economics are.

I'm somewhat familiar with it; however, because I live over 40 mins away (on an exceptionally good ATL traffic day) I have never been there. That is very revealing info indeed. I've often wondered what the revenue and margins look like for a craft beer focused retailer. Those are some rough numbers and understandable why the owner is ready to sell. The unfortunate reality of the industry is, as demand shrinks, so will supply until equilibrium is reached. Wish there was a way to boost demand. I can only drink so much beer and my liver not give out. Thanks for posting.

That's so interesting to see. Razor thin margins!

I wonder if that's typical for beer stores in general or typical for the state/area. I only have two beer walls inside of a health food store and my numbers are over double/triple that, last year.

All craft beer or also major beer brands?

Ale Yeah also has draft beer. Which you would think would help their margins but they are in a more expensive area for retail in Atlanta. Here is part of their tap list and prices.

It's mostly craft, and skews hard towards local. I have regular stuff like Asahi, Urquell, Ayinger, Weihenstephaner, as well as like some Sierra Nevada/Lagunitas/North Coast/etc. Carefully selected mainstream beers.

Urquell sells really well because of the price point, but our best seller is a local hazy IPA.

Tbh, that's a pretty good draft list! Everything I've had from Dutchess Ales has been spectacular.

Equilibrium are from my neck of the woods (ish) as well and their beers are pretty amazing.

I recognize most on those list as yummy, fun beers to drink.

Are profit margins better on domestic craft or imports? I'm wondering if imports improve your margins. I would say that Ale Yeah's issue is probably high overhead due to location. But I see you're in NY, which I would think just about everywhere in your state the cost of leases and overhead would be higher.

Right, they have a good draft list and the prices are typical of the metro area but I bet their lease and county fees are more than the county I live in well north of them.

Since we're in a really touristy area that thrives on "local", the beers that make me the most money are from the local breweries. I purposefully keep the prices low on the imports, and cut into my margins, so that it moves a little faster and I can keep carrying it/give ppl access to it vs the local stuff which can hang out because it's never going to get cut.

Good point. I’m betting the food pulls in customers who happen to buy beer too. I wouldn’t be surprised if the local Whole Foods or Sprouts sells more craft than Ale Yeah in this case.

When Ale Yeah opened 15 years ago it didn’t have either healthy food store nearby. The mainstream stores had limited selection and quality issues. Back then you had to trek to a speciality beer store, now you don’t. Not to mention the half dozen breweries that opened within 5 miles in the last 15

Added competition means a place like Ale Yeah has to rely on traffic from essentially just the local neighborhood. While it has favorable demographics, the actual population is not large. Add in >$2.50/ft* for real estate to spend nearly 20% of revenue on real estate seems tough.

of note their current inventory is worth $18k and they sell $400k/yr they turn their inventory well (it could be that they shelves are bare though)

(*which is honestly nuts for this location, it’s a micro commercial strip in a residential area - other tenants are a hair salon, donut shop and ever-changing restaurants)

Kind of a shame this thread was moved to the local forum, it wasn’t really meant to highlight one stores struggle as much as the industry as a whole. Sigh

Decatur, that area should have a little more craft beer friendly population. But I figure they have some tough overhead costs given that location. I need to check them out sometime. Very curious.

That good insight! I'm probably a headache consumer for folks like you. I love my German and Belgian imports (and I'm willing to pay a little more for them) but I also really try to support my local breweries either buying their product from nearby retailers or going to the brewery where I don't have close access. I really appreciate the retailers who keep a good stock of imports because that inventory has shrunk around me the last 5 or so years. I used to could easily find something like Schneider Weisse Tap 7 at several stores, now I have keep tabs on who has it and when. Thanks for the insight.