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SALT LAKE CITY (AP) -- The Utah Department of Alcoholic Beverage Control should consider closing some low-performing liquor stores instead of reducing hours at more profitable ones, according to a legislative audit released Monday.
The department has been ordered by lawmakers to cut more than $650,000 from its budget despite growing sales because legislators wanted every state agency to share in recent rounds of budget cuts.
State regulators are considering cutting hours at stores that are opened 12 hours a day by opening an hour later and closing an hour earlier. Those stores are generally open from 10 a.m. to 10 p.m.
About 9.5 percent of those stores' sales occur during the two hours regulators are considering eliminating.
An analysis by DABC said some customers would adjust their buying habits and shop during the reduced hours, but the department would still see a 3.5 percent drop in sales, or $5.1 million.
The audit criticized the department for providing no evidence to back that up.
"DABC management is assuming that because the stores will not be open as many hours, the state will lose those spur-of-the-moment sales that would have occurred during those two hours.
The DABC has no documentation on the amount of sales that are spur-of-the-moment, or evidence to support their assumption that they would lose spur-of-the moment sales," the audit states.
The audit also said DABC acknowledged that the effects of the cuts on sales may not be known in the future because sales will likely continue to increase. Alcohol sales have risen in recent years as more people who are not Mormon move into the state and tourism has increased.
The audit says the department should consider closing stores to save money if there's another one nearby because customers of closed stores would start shopping at other locations a few miles away.
The audit did not say how it determined that customers would shop at nearby stores or what its impact on sales would be other than to say it "could potentially have little effect on overall sales."
The audit didn't specify exactly how many stores the DABC should consider closing but identified examples in Pleasant Grove, Salt Lake City and Springville.
(Copyright 2010 by The Associated Press. All Rights Reserved.)
