If grocery stores start selling beer, do sales increase across other categories of products too? New research suggests that may very well be the case.
Researchers found that once beer appears on grocery store shelves, overall store sales grow. Households that buy beer begin going to grocery stores more often and end up spending more on other products.
Alcohol laws in the US vary from state-so-state (and even from county to county in some cases). So while consumers can buy wine at a grocery store in California without issue, those in Alaska have to go to a licensed liquor store. But there’s been a push to relax the laws in some of the stricter states latey.
“In recent years, the trend has been to privatize alcohol sales, moving beer into grocery stores, often followed by wine and liquor,” said Bradley J. Rickard, professor of food and agricultural economics in the Charles H. Dyson School of Applied Economics and Management, part of Cornell University’s SC Johnson College of Business. “Our results show that the relaxation of laws that allow alcoholic beverages to be sold in grocery stores can lead to fundamental changes in how people shop, where they shop and what they buy.”
Rickard’s study, co-authored with Timothy J. Richards (Arizona State University) and Anna Malinovskaya (Cornell University, Ph.D. ’24), identified these changes by looking at Colorado, which in 2019 allowed grocery stores to sell full-strength beer for the first time. Using national store and household-level data, they found:
- Frequent Visits: Beer-buying households visited the grocery store 3.6% more often once beer became available.
- Higher Spending: These same households increased their monthly grocery expenditures by 8%.
- Cross-Category Gains: Focusing on the top 10 grocery categories (e.g., snacks, cheese, deli meats, fresh produce, and soda), consumers spent 17% more on items they often pair with beer.
The increased visits and spending was likely a welcome boost for business in a sector that operates on profit margins between 1% and 3% — far less than most other retail channels.
A Rare Natural Experiment
Traditionally, studying whether a single product category truly drives overall store sales is difficult because grocery assortments are fairly stable. But a sudden change in Colorado’s policy in 2019 created a natural experiment: Grocery stores there went from not being allowed to sell full-strength beer to full access overnight. Comparing Colorado’s store and household data to that of Minnesota, which did not implement a similar law, revealed beer’s power to attract shoppers.
Before the policy change, Colorado grocery store shoppers who would have likely bought beer had it been available, had to make seperate trips to the liquor store. After the regulatory change, that’s no longer the case.
Policy and Industry Implications
“In recent years, the trend has been to privatize alcohol sales, moving beer into grocery stores, often followed by wine and liquor,” Rickard said.
Take New York, for example. In New York, grocery and convenience stores may sell alcoholic drinks with a maximum of 6% alcohol by volume, which excludes wine and hard liquor from being sold.
There are some states still debating whether to privatize these sales, such as New York. Proponents say it provides convenience to consumers and boosts revenue for grocery chains. However, small liquor-store owners and temperance groups worry about negative impacts, including loss of business or easier access to alcohol.
“It has been a perennial issue in places like New York,” Rickard noted, “with some people saying it would help local wineries if grocery stores could sell wine, while owners of wine and spirit shops fear it would kill hundreds of small businesses.”
Citation: Malinovskaya, Anna, Timothy J. Richards, and Bradley Rickard. 2025. “ Destination Categories, Channel Choice, and Beer Distribution Laws.” American Journal of Agricultural Economics 1–33. https://doi.org/10.1111/ajae.12516