Alcoholic Beverage Sales in Ontario: How It’s Going

By Angela Altass

Convenience stores in Ontario have been able to sell beer, cider, wine and ready-to-drink alcoholic beverages since September 5, 2024. Convenience and Carwash Canada decided to check in and see how sales have been going.

While most of the companies and people we spoke with have been happy with things so far, there have been a few notes about initial ordering confusion and getting kinks out of the system.

The Alcohol and Gaming Commission of Ontario (AGCO) opened its application process for new and existing convenience and grocery stores in Ontario to apply for alcohol retail licenses on June 17, 2024. A spokesperson for AGCO confirms that as of October 6, 2024, it has approved 4,569 convenience store licences.

Most of the licenses issued to date have been to businesses that already hold a lottery retailer, liquor sales, or grocery store license from the AGCO. As such, they have already been vetted for eligibility and compliance (i.e. their ability to act with honesty, integrity and in accordance with the law) and therefore usually received their new licenses in a matter of days.

“This reflects the AGCO’s commitment to reducing regulatory burden wherever possible, providing excellent service, and saving licensees time, effort, and money,” says the spokesperson. “At these newly licensed establishments, AGCO inspectors are paying particular attention to responsible sale requirements including youth protection measures (e.g. age verification and refusing sale to minors), proper training and certification of staff, respecting the hours of service, as well as advertising and product display requirements. While the AGCO has been pleased with the overall levels of compliance observed to date, we will continue to monitor the situation closely as it continues to evolve.”

The AGCO launched a dedicated page on compliance support for convenience and grocery stores to support their safe and responsible sale of alcohol in Ontario. This includes a Convenience Store Licence Obligation Guide listing the requirements for staff training.

Dave Bryans, owner of C Store Consulting and past CEO of the Ontario Convenience Stores Association, says there has been some confusion regarding picking up orders versus the cost for delivery for small businesses and some challenges regarding the availability of products when ordering through the Liquor Control Board of Ontario (LCBO) portal but notes that this needs to be considered in the context of how new the system is in Ontario.

“The first month of selling was quite a ride for many to sort out delivery schedules, minimums, costs and store layout of both the ambient section and cold vaults,” says Bryans. “While it’s too early to evaluate the business model, customers have been excited to have alcohol readily available close to home.”

Product selection has been a challenge until each store understands the needs of the community due to the wide range of beverage alcohols in the LCBO catalogue, says Bryans.

“To be fair, this opportunity has moved at lightning speed with over 4,000 outlets all wanting information, products and updates in a short period of time,” says Bryans. “Every day we believe the offerings will get better, the category understanding will improve, and the customer buying experience will be convenient and appreciated by all.”

C Store Consulting has partnered with Oliver Solutions to offer an AGCO-approved beverage alcohol training program, Safe Selling, to convenience and grocery stores in Ontario.

“The reason the Safe Selling program was created was to offer thousands of family-run c-stores and grocery stores an approved certification training program at a reasonable cost to ensure employees are trained responsibly to sell beverage alcohol,” says Bryans. “There was only one certification option prior to September for training at a high cost to all employees and employers and we saw the need for a better and more reasonable alternative online. Safeselling.com offers an introductory price of $14.99 per employee or a bundle of five employees for $60.”

Most stores have been appreciative of the many alcohol companies that are calling on them to offer insights into this new category, notes Bryans.

“My advice to all retailers is to work with your trusted alcohol representatives to understand the needs in your community, such as top brands versus local craft beers and imports versus value segments as well as the types of wines you should be carrying, including VQA Ontario products,” says Bryans. “The future is so bright for the channel as we forge ahead where we will see higher traffic counts, more impulse sales and a new level of customers that want beverage alcohol conveniently and quickly when in a c-store.”

Kenny Shim, president of the Ontario Convenience Stores Association (OCSA) and owner of Busy Bee King Mart in Toronto, Ontario says the introduction of beer and wine sales has been a great addition to Ontario convenience stores.

“I’ve seen consistent weekly sales growth and feedback from OCSA members mirrors this positive trend,” says Shim. “Customers are responding well to the convenience but the ordering and delivery process could use improvement, as many members have noted. I’ve been actively working with vendors, the AGCO, and the LCBO to streamline these operations, which will take time to full optimize.”

Overall, selling alcoholic beverages in convenience stores is a promising development, says Shim.

“It’s clear that this opportunity has enormous potential for our industry and I’m confident it will continue to benefit stores as we refine the process,” says Shim.

Scott Simmons, president, Ontario Craft Brewers provided the following statement:

“Craft brewers have long waited to be able to sell their fantastic beers in more places and have moved quickly to sell in these new channels including at convenience stores. We saw store owners saying this week that sales have been going well so I encourage every store owner reading this to seek out and stock craft beer from locally-owned breweries. Even more than the mandated 20 per cent. It makes sense on so many levels. Ontario’s craft beer sector is defined by community and we know convenience stores are landmarks and gathering spots in many towns across the province – and having these stores featuring craft beers is a great way to promote local. While it is too early for specific sales figures, we believe that the economic upside for convenience stores is big if they focus on local craft beer. Supporting local has never been stronger in our province, especially since the pandemic. People want to support local producers in their communities, including craft breweries. And there is significant data from grocery stores that shows that craft beer consumers generate larger overall basket sizes when they shop, which helps generate incremental margin to c-stores. Convenience stores have the potential to be an important sales channels for craft brewers and my message to store owners is to embrace craft and put in the effort to become a craft beer destination in their community for locals and visitors alike. The positive impact on the local economy from doing that will be outstanding. It’ll be a true win-win and very exciting future!”

7-Eleven Canada shared the following statement regarding the sale of alcoholic beverages in their stores:

“We’d like to thank our phenomenal 7-Eleven Canada customers who have made the launch of beer, wine, ciders and coolers for takeout and home delivery a stellar success. Time and again our customers tell us how this change makes their lives more convenient. This wouldn’t be possible without our team’s excellent execution in-store, and without the amazing partnerships with our vendors, as well as the LCBO and AGCO, who have helped make this launch as seamless as possible.”

Travis Macmillan, owner, Macmillan’s Store, Cornwall, Ontario, says that alcoholic beverage sales have increased store foot traffic.

“It’s doing very well,” says Macmillan. “I absolutely think it’s a good thing. This store has been here for 52 years, with a very well-established client base, and it has always done very well but ever since COVID, it’s been declining drastically. Since Christmas, I’ve laid off all of my staff. I’ve been working 14-hour days, seven days a week. Alcohol sales are definitely increasing foot traffic and I believe it’s the key that’s going to save us.”

Customers are coming to the store to purchase alcoholic beverages and are also buying other things while they are there, says Macmillan.

“It’s going to save the convenience store industry because it was pretty close to the bottom falling out,” says Macmillan, noting that customers are putting in requests for items on a daily basis. “I get asked for all kinds of things and I hop onto the LCBO site immediately to make sure I get that product for them within a two-week period. The ready-to-drink pre-mixed drinks are the biggest thing going right now and, with women it’s the wine.”

Macmillan said the store has received some backlash from a few older customers who feel that alcohol beverages do not belong in convenience stores.

“As for increasing drinking and driving, I think it’s actually the opposite,” says Macmillan. “You’re not going to take your car and risk the drinking and driving when you can walk across the street to your local store and get a can of beer. We are all properly trained and, obviously, we are not going to sell to somebody who is intoxicated.”

Marites Lee, owner, Campden General Store, Campden, Ontario said although they did not have any preconceived expectations regarding the sale of alcohol beverages, she did apply for a license as soon as she was able to do so.

“It was a welcome opportunity,” says Lee. “The locals in my community had been asking when we would be able to sell and serve alcoholic beverages. Our goal has been to figure out which ones will sell. We went with the top 10 popular beers for starters. Our customers are happy. Molson and Twisted Tea are our top sellers.”

Laurie Ure, owner, Ure’s Country Kitchen & Variety, Harrow, Ontario says they applied for the licence to sell beer and wine but were not currently selling alcoholic beverages until a new walk-in cooler is built in the store.