Breaking the Alcohol Chain : Brotherhood Crusade Plans Liquor-Free Convenience Stores

Touting it as a model for other merchants to emulate, Brotherhood Crusade Chairman Danny Bakewell unveiled plans for the development of a chain of convenience stores in the Los Angeles area that will not sell alcoholic beverages.

The plans were revealed Thursday at the site of the first store, a 3,000-square-foot structure at 9145 S. Broadway acquired by the Brotherhood Crusade’s Mom & Pop Economic Development Corp., a nonprofit organization that will develop and manage the stores.

The store, acquired for $250,000, is now empty but will be stocked and opened in September, Bakewell said. The project has the support of City Councilman Mark Ridley-Thomas and organizations that want to limit the number of liquor retailers in southern Los Angeles.

“We want to set a tone, establish leadership and pioneer a way to excel without exploiting those who have a dependence on alcohol,” Bakewell said at a press conference. “You cannot ask other people to adhere to standards you cannot meet yourself.”

The liquor store debate is a highly charged one that pits some residents--who blame crime, alcoholism and neighborhood blight on high concentrations of liquor stores--against liquor store owners who have complained that attempts to block their rebuilding efforts constitute an illegal attack on their property rights.

Armed with a petition bearing 35,000 names, the Community Coalition for Substance Abuse Prevention and Treatment, a group of South Los Angeles residents, earlier this month urged Mayor Tom Bradley to endorse a law to prevent the wholesale rebuilding of about 200 liquor stores destroyed during the recent riots. Bradley expressed sympathy for the cause, but said he could not promise to prevent the rebuilding of many of the stores.

The substance-abuse coalition said it supports the Brotherhood Crusade’s proposals. The store would serve as an inspiration to small liquor retailers in southern Los Angeles, Karen Bass, the coalition’s executive director, said Thursday.

“Businesses can be successful without selling alcohol,” she said.

Convenience stores can eschew sales of alcoholic beverages and succeed--but it’s often more difficult that way, said Sid Doolittle, partner at McMillan-Doolittle, a Chicago-based retail consultant that analyzes consumer behavior. Doolittle said liquor and wine are not major sale items at convenience stores but that beer accounts for up to 20% of the revenue at many outlets.

“It would be a hardship for some stores to suddenly stop selling beer,” Doolittle said. “However, if you’ve never had beer sales, you can still build a strong customer base by providing a strong fast-food service by offering sandwiches and sodas at a good price.”

Indeed, pricing is a key to success in the convenience-store business in Los Angeles and elsewhere, said Barbara Wedelstaedt, an analyst who follows that industry for Duff & Phelps in Chicago. The industry is very competitive, she said, noting that Circle K--the nation’s second-largest convenience-store chain--is in bankruptcy reorganization. Also, Southland Corp., parent of the 7-Eleven chain, emerged from bankruptcy reorganization in 1991.

“These stores have to be very price competitive on high-volume items like cigarettes and soda,” she said. “It’s particularly tough in Los Angeles because the major supermarkets--by remaining open 24 hours--are actually competing with the convenience stores.”

Wedelstaedt said that many convenience stores depend on lottery sales to attract customers, who tend to buy other items once they are inside the store.

Bakewell said the store on Broadway would seek authority to sell lottery tickets.

Brotherhood Crusade officials say 50% of the profit from the stores would go to the nonprofit Mom & Pop Economic Development Corp. for future investments. The other half would be used by the Brotherhood Crusade, an organization that provides financial support and technical assistance to nonprofit black organizations involved in health care, education and general welfare. Bakewell said his organization had identified five other possible store sites and would welcome investors and joint-venture partnerships.