Does the LCBO Help or Hurt Small Town Ontario Downtowns?

Written by  //  November 30, 2013  //  Posts  //  No comments

LCBO, Wasaga

On a camping trip last summer I drove through a desolate main street in a small Ontario town looking for a place to pick up beer. The whole street was being ripped up for a beautification project funded by the Province, ostensibly in an attempt to draw customers back downtown. I think the expression “putting lipstick on a pig” is a bit inappropriate as the downtown was lined with beautiful heritage buildings, but without retail anchors the main street is unlikely to succeed. I did eventually find the LCBO, located on the outskirts of town in a relatively new suburban site.

The irony here, for my non-Ontario readers, is that liquor distribution is a government run monopoly. The “LCBO”, or the Liquor Control Board of Ontario, is one of the world’s largest single purchasers of beverage alcohol products with annual revenues of 4.7 billion. The LCBO is also one of the best anchor tenants you can get for a retail plaza, as other stores will pay a big premium to be located nearby to take advantage of the traffic generated. So why is the LCBO locating in a suburban location, drawing customer traffic away from the downtown, while the other arm of the Province is spending millions installing interlocking pavers along the empty main street?

Was this situation I saw on my trip a one-off example, or has the LCBO regularly been choosing non-downtown locations in small towns? To find out, I hired a researcher to measure the walking distance between the main streets of Ontario towns and their LCBO store. Towns were chosen on the basis of having only one LCBO and having a main street. The researcher calculated the walking distance for 110 stores, which isn’t the full picture, but is enough to start a conversation on this issue. I have broken the data in the below pie chart into 3 categories; a) less than 50 metres, b) 50 to 400 metres, and c) above 400 metres. 50 metres distance or less shows the LCBO is either actually on, or adjacent to the main street. In such close proximity, there is great potential for cross shopping between the LCBO and stores on the main street (there is no need to re-park). 400 metres or less is what planners often use as a comfortable walking distance, although I’m pretty sure most customers would get back in their car and re-park near the main street if they were going to be cross shopping. 400 metres and above is beyond what people would typically walk, and in a small Ontario town it generally means you are getting towards the outer edges of the commercial district.

Based on the data collected, 75% of the LCBO stores are technically within walking distance of the main street. I’m pleasantly surprised to see these numbers, although I think it would be great to have the majority of stores within 50 metres of a main street.

I was also curious to see if there was any relationship between the year the LCBO opened their stores, and how far it was located from the main street. The number of LCBO stores opened each decade going back to the 1920s is shown in the chart below. It is interesting to see how much the LCBO slowed down expansion since the 1980s. Also of note, I found out that many small Ontario towns have global ambitions with names including; Delhi, Zurich, Athens, Paris, Spanish, and Brussels.

 

The final chart averages the walking distance from main streets for LCBOs opened during each decade. I should note that while the trend over the past 30 years looks quite alarming, there isn’t enough data collected over this period to point fingers. I would suspect that there has indeed been a trend towards peripheral locations during this time period (as seen throughout all aspects of the retail industry), but more data is needed to claim this conclusively.

 

In closing, LCBO’s role in small Ontario towns seems to be varied, and in many cases they are having a positive impact by being centrally located. That said, if we are going to be investing tax dollars in attempting to revitalize main streets, we are going to get a bigger bang for our buck by relocating suburban LCBOs. The beauty of liquor is that customers will buy it, more or less, no matter how expensive and inconvenient it is to acquire. For future LCBO stores, we should strive to be more strategic in where they are located to leverage this consumer demand for public benefit.

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Reurbanist

Reurbanist is a multi-disciplinary firm that blends land use economics with urban planning and economic development. At its core, Reurbanist believes that great urban places that are compelling and vibrant must find success at both a fiscal and social level. Stronger cities and urban destinations translate into improved job growth, municipal tax revenue, and a higher quality of life for residents.

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