State liquor license auctions: Who is paying the most?
Since Pennsylvania began auctioning off expired restaurant liquor licenses last fall, five large supermarket and convenience-store chains have combined to buy up more than 60 percent of the licenses sold.
Two of the five — grocery chain Giant Food Stores LLC and convenience-store chain Sheetz Inc. — have accounted for 40 percent of the winning bids.
But their paths diverge when it comes to price. Giant has accounted for some of the highest bids, Sheetz for some of the lowest.
Grocery chain Weis Markets Inc. also has been an active bidder, alongside convenience-store chains Turkey Hill and Rutter's Farm Stores, which bids as CHR Corp.
All told, Giant, Sheetz, Weis, Rutter's and Turkey Hill have won 100 of the 165 expired licenses sold so far at the auctions, which are held by the Pennsylvania Liquor Control Board.
Giant has spent the most of the five at more than $8.1 million, followed by Sheetz at more than $3.4 million. Weis was third with more than $2.7 million, followed by Rutter's ($1.6 million) and Turkey Hill ($1.1 million)
The auction sales are authorized by Act 39, which allows more retail outlets to sell beer and wine in Pennsylvania. The PLCB has accumulated about 1,200 expired licenses since 2000.
The auction format tends to favor larger retailers with deep pockets, as top bidders have just 14 days from the date of selection to remit the full bid payment to the PLCB.
Here's how the four auctions have broken down so far.
Sheetz has been the top bidder on 35 licenses so far, while Giant has claimed 30.
But Giant has paid more for its licenses.
According to Business Journal analysis of auction results over the last year, Giant has spent more than $8.1 million on those winning bids, or an average of $270,057 per license.
Giant has spent as much as $556,000 and as little as $39,001.
Giant, active in all four auctions, has paid more to get liquor licenses in growing counties and areas where licenses are harder to find. Scarcity drives up the price.
Giant has successfully won licenses in Chester, Cumberland and Montgomery counties, three counties where prices exceeded $500,000.
The chain bid more than $500,000 on four licenses in the first auction. It is the only winning bidder to exceed $500,000 for a license.
By comparison, Sheetz has spent more than $3.4 million, or an average of $98,089 per license.
Sheetz was busy in the first two auctions, where it acquired 32 of its 35 licenses.
Sheetz has largely gone after licenses in smaller and more rural counties where licenses are less expensive. Sheetz has won licenses in Adams, Butler, Erie and Indiana counties, for example.
The convenience-store chain has bid more than $100,000 only seven times.
Sheetz has paid as much as $307,500 and as little as $25,001.
Weis was the top bidder twice in the first two auctions. But it has added 16 licenses since then, including five in the latest auction.
The grocery chain has spent more than $2.7 million on 18 winning bids overall, for an average of $150,773 per license.
Weis has won licenses in lower-cost areas such as Bedford, Berks and Clinton counties, while also going after more expensive licenses in Lancaster and Centre counties.
Weis has spent as much as $335,419 and as little as $31,419.
Rutter's and Turkey Hill
Rutter's has spent more than $1.6 million on eight licenses in the auctions, or an average of $200,288 per license.
Turkey Hill's winning bids for nine licenses add up to more than $1.1 million, or an average of $127,344 per license.
Rutter's has won seven of its eight licenses over the last two auctions. The convenience-store chain has spent about $280,000 each for three licenses in York County. Berks, Blair, Dauphin, Franklin and Lebanon counties have been other target areas for Rutter's.
Turkey Hill spent $162,000 and $161,000 on Dauphin County licenses last year. It bid $407,600 this year for a Lancaster County license, its highest winning bid. The company also has focused on lower-cost licenses in Lackawanna, Lebanon, Luzerne and Schuylkill counties.
A Lackawanna County license went to Turkey Hill for $26,500. Another in Schuylkill was won for $30,500.
In Central Pennsylvania, 22 licenses have been sold across the four state auctions.
The breakdown, by county, is as follows:
- Cumberland County: 1
- Dauphin County: 6
- Lancaster County: 6
- Lebanon County: 3
- York County: 6
Cumberland County set the record for highest price at $556,000. It was for a license bought by Giant in the first auction last fall.
The cheapest license purchased in the midstate at auction was in Lebanon County in the second auction. Turkey Hill bid $112,500 for that license.
Lancaster County's highest-cost license went for $407,600. And all six licenses sold in Lancaster County have cost more than $300,000.
In Dauphin County, licenses have sold for $200,000 or less at auction. In York County, $280,000 to $290,000 has been the norm.