There is an explanation. The LCBO doesn't have to pay for their orders for 120 days. If they sell through a shipment before that time they bank the money. It's why they like stores to carry fewer brands (fewer brands on the shelf, less choices consumers have, the more they buy fewer brands). Unlike a grocery store which carries something like 40,000-50,000 SKUs majority of LCBOs carry far, far less. And, even though the margins are far narrower, the turns on macro brands are higher. Their model is concerned primarily with turns, not straightforward profit.Kel Varnsen wrote:Which seems odd. I mean simple math would tell me that with more beer buying options Coors Light is going to move off of LCBO store shelves at a slower rate. But to counteract that they are going to start carrying more Coors light?
You'd be amazed because this 120 day policy which LCBOs are actually the most profitable. A store that generates five times more revenue might, at the end of the day, be only slightly more profitable. Great example is the tiny store at Albion Rd and Finch. Something like 80% of their sales are concentrated to under a dozen brands (aside from Dragon Stout all of which are spirits) so, for the LCBO, they're paying months worth of orders with house money.
