Sheetz marked ‘new era’ in alcohol

‘Convenience restaurant’ helped lead way for other stores to pursue liquor licenses in?Pa.

It was about 2 p.m. on a Thursday when a 12-pack of Coors Light passed across the checkout counter at a Sheetz “convenience restaurant.”

The sale likely seems routine now, but 10 years ago, the Mirror reported that the 12-pack “marked the start of a new era in Pennsylvania alcohol sales.”

The move was surrounded by controversy, and Sheetz had to jump through a number of hoops to make it happen.

The company dubbed the 17th Street and Pleasant Valley Boulevard location a “convenience restaurant” with a separate register to ring up items that can’t be sold with alcohol — a system still in place.

A required seating area was constructed; gas pumps were placed on an adjacent land parcel and customers were required to pay at the pump so gasoline would not be sold in the same location as beer; speed bumps were placed between the pumps and the restaurant as a dividing line; and more.

Now, beer and other permitted alcoholic beverages fill walk-in coolers, grocery aisles and endcap displays at some stores across the state. But that doesn’t mean everyone is on board with expanded availability.

The initial sale

Those first Coors beers were purchased on the afternoon of Feb. 1, 2007, years after a campaign began to transfer a restaurant liquor license to the store at 17th Street and Pleasant Valley Boulevard. The Penn­sylvania Liquor Control Board conditionally approved the transfer in 2004.

In 2007, the Mirror reported excitement and optimism from Sheetz officials, but there also was opposition from organizations like the Malt Beverages Distributors Association of Pennsylvania.

By Feb. 24, beer sales at the Sheetz store were halted by a Commonwealth Court ruling, which determined Sheetz did not meet “the legal standard of a retail dispenser.”

That hiatus lasted until Feb. 28, when alcohol sales resumed due to an appeal of the earlier ruling by the PLCB to the state Supreme Court.

The Malt Beverages Distributors Association continued to press a lawsuit, aiming to again halt the sales, and a legal battle ensued, according to previous Mirror reports

But now, 10 years later, alcohol is available at more than a dozen Pennsylvania Sheetz locations, as well as other convenience and grocery stores, albeit under certain restrictions.

From few to many

In 2007, then-Sheetz CEO Stan Sheetz told the Mirror that it was doubtful that alcohol would be sold at the company’s other locations.

“(If we have more), it will be very few and far between,” Sheetz said at the time.

Last week, Sheetz officials offered a much different perspective.

“Our goal would be to provide alcohol in every store where we are able to,” Sheetz Vice President/

General Counsel Gary L. Zimmerman said.

That’s apparent as Sheetz “soda caves” across the area have been converted into “beer caves” and alcoholic beverages fill coolers.

Some stores even offer wine-to-go, allowed because of Act 39 — the Adult Beverage Convenience and Wine Privatization Act — passed by state legislators in 2016, which made wine sales available to businesses with hotel and restaurant liquor licenses.

In fact, Sheetz became a pioneer in wine sales, too. Last fall, a Sheetz store along King Street in Shippensburg became the first convenience store to sell wine-to-go with a new “wine expanded permit.”

“Where we are able, we will have wine,” Zimmerman said last week.

Currently, 23 Sheetz stores in Pennsylvania offer beer and other malt beverages, Zimmerman said, revealing liquor licenses are pending at nearly 20 other locations.

Offering alcohol at Pennsylvania stores creates a more consistent experience for customers, as stores in other states already offer beer and malt beverages, Zimmerman said.

“It’s part of our model in the other five states that we operate in,” he said. “Now that we’re able to offer beer, it just makes it consistent. That makes it nice for the consumer to know what we offer.”

A popular pursuit

To obtain a restaurant liquor license, businesses also must sell food and meet square footage and seating requirements.

Those rules have impacted the way Sheetz stores are designed, Zimmerman said.

“Years ago, our leadership made the decision to build new stores and rebuild old stores and add seating,” he said. “Most of the modifications we made to the stores that are already selling have been very minor.”

Other businesses have followed that model, creating beer-garden-like areas within their stores to meet regulations, as large chains continue to buy up licenses.

“It’s still kind of in its early stages as it expands,” said Sgt. Kent Bernier, district office commander with the state police Liquor Control Enforcement Bureau. “It seems to be popular here. It’s probably good for business.”

A PLCB spokesman, Shawn Kelly, was more reluctant to discuss the popularity of liquor licenses among large convenience and grocery store companies.

The PLCB does not keep data on how many licenses are purchased by those types of stores and how many are purchased by smaller bars and restaurants, Kelly said.

The results of recent restaurant liquor license auctions — made available via Act 39 of 2016 — may offer some insight into that popularity.

Large convenience and grocery store companies — chiefly Sheetz, Giant Food Stores LLC and Weis Markets Inc. — appear overwhelmingly on a list of high bidders from the first three auctions.

Those bids are often for hundreds of thousands of dollars and in some cases more than a half-million dollars.

Still, those results may not be representative of the whole alcohol-sales landscape, Kelly said.

“You can certainly look at it, but I don’t think it would be complete,” he said, unable to provide any more accurate information.

Kelly also clarified that the 17th Street Sheetz was not the first gas-selling business to also sell alcohol. He said some gas-selling convenience stores have offered alcohol since the 1950s and ’60s, though he did not name them.

The Sheetz store was simply “the first business … of that type to garner widespread attention,” he said.

Continued opposition

Along with challenges from groups like the Malt Beverages Distributors Association, small-business owners have spoken against the chain stores’ push to buy up licenses.

As recently as last year — when many changes were made to liquor regulations — restaurant advocates spoke out, saying it’s a concern.

In Pennsylvania, the number of restaurant liquor licenses is finite, with only a certain number available in each county based on population. No new licenses are created.

That means both restaurants and convenience and grocery stores meeting PLCB regulations must compete for available licenses. Large business owners often have the deep pockets to offer higher prices for the expensive licenses.

That’s a problem because alcohol sales are vital to many restaurants, officials with the Pennsylvania Restaurant & Lodging Association said in October.

“Especially right now, that’s where your profit is,” an official said of restaurant alcohol sales. “It’s huge for them to be successful.”

Zimmerman said Sheetz officials were not surprised by some resistance.

“I think we were blazing a trail back then,” Zimmerman said. “Anytime you are pioneering like we are, you are probably going to get some opposition in the early stages.”

Those concerns are in addition to worries from area residents who occasionally attend liquor license transfer hearings to express fears that expanded availability will mean more alcohol-related crimes and accidents.

Some of that opposition has disappeared since 2007, Zimmerman said.

“I think now it is becoming more accepted,” he said, explaining push-back continues in some conservative communities. “Each community has its own concerns. Each community is unique.”

And there is no evidence that expanded availability has created a “significant increase in alcohol-related incidents,” Bernier said.

“We have very few issues at convenience stores,” Bernier said, explaining his office enforces PLCB rules in eight counties, including Blair.

Mirror Staff Writer Sean Sauro is at 946-7535.