Liquor Store Business Valuation Benchmarks

Business owners, prospective buyers, and industry investors rely on a diverse set of financial benchmarks to assess the value of a business. We have compiled data from current BizBuySell listings and sold businesses to provide insight into the business for sale market and important benchmarks for pricing and evaluating liquor store businesses relative to industry standards.

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Highlights of Liquor Store Businesses Sold on BizBuySell

Liquor stores listed and sold on BizBuySell are comprised primarily of small, locally owned businesses engaging in the sale of alcohol for consumption off-premises. The typical liquor store sells a variety of beer, wine, and spirits, in addition to non-perishable snacks, tobacco products, and related goods. Inventory is similar across these businesses as customers expect to find the most common brands, though some stores specialize in higher-end products, or tap into local breweries, distilleries, or wineries, to cater to niche markets in more affluent areas.

Liquor Store Business Transaction Trends

Sales of liquor stores remained strong through the pandemic, since these businesses were included as essential businesses that remained opened during lockdowns. Additionally, sales prices of liquor store businesses appear largely unaffected by increasing interest rates in 2022 and 2023, unlike many other sectors. Median sales price of liquor stores sold on BizBuySell increased 43% from 2020 through 2024, with relatively stable, consistent growth each year.

Liquor Store Business Valuation Multiples

Valuation, or pricing, multiples are financial tools that allow for comparisons between businesses that have different levels of revenue and earnings. They represent the sales price of a business relative to its size and financial performance, and given enough individual business sales data, they represent what the market is willing to pay for a business, given its revenue and earnings.

Valuation Trends

Business values and associated multiples fluctuate over time, influenced by a variety of macroeconomic factors, such as interest rates, inflation, consumer spending, and overall economic growth. Valuation multiples of liquor store businesses sold on BizBuySell have increased materially over the past five years, outpacing most other sectors. Having improved following the Covid-19 pandemic, liquor store valuation multiples have held up despite pressure from increasing interest rates.

Earnings Multiples

Earnings multiples represent the value of a business relative to its owner’s discretionary earnings or "cash flow". Arguably the most important valuation metric - as seller's discretionary earnings will often dictate how much a buyer is able to borrow to finance the business acquisition - business valuations tend to hinge on the earnings multiple.

Revenue Multiples

Revenue multiples represent the value of a business relative to its overall sales or revenue. In conjunction with an earnings analysis, revenue multiples are commonly used to value a business based on its sales volume.

How to Interpret These Multiples

Recent Listings vs. Sold Businesses

We calculate and provide valuation multiples from two sources: Current and recent listings of liquor store businesses for sale, and our database of "comparable" businesses sold on BizBuySell. Multiples based on listing data are always higher due to owners setting asking prices above what their businesses might typically sell for. This occurs either intentionally as a negotiation strategy, or incidentally due to business owners’ common tendency to overvalue their own businesses.

Multiples based on comparable businesses - "comps" in business broker parlance - are much more useful as they represent the prices at which businesses ultimately get sold. Business brokers and valuation professionals will always turn to local comps when pricing businesses for sale or evaluating businesses for acquisition. We provide both sets of data at the national level to offer general context. Local business sale comps by sales class suitable for pricing and negotiations are available in BizBuySell's Business Valuation Report.

Quartiles, Median, and Average

No two businesses are identical, and as such, valuation multiples exist in a range. We have carved out four common values within this range: Lower quartile represents the value under which the lowest 25% of valuation multiples fell. Upper quartile represents the value above which the highest 25% of multiples fell. Median is the middle of the range, and average is the mean of the set. Mean is almost always higher than the median, driven by a minority of high revenue, high-value businesses sold at multiples above the upper quartile.

Businesses with consistent financial performance, above average revenue and earnings, demonstrable growth potential, low owner involvement, unique competitive advantages, and a seller willing to finance will command a multiple at or above the upper quartile. Lower revenue businesses with thin profit margins, full-time owner involvement, and many direct competitors will trade at or below the lower quartile. Most businesses will fall somewhere in the middle.

Based on this data, half of liquor store businesses are valued and sold between 2.1 and 3.75 times their annual seller discretionary earnings, with a 25% of exceptional, higher volume stores trading above this range, and 25% of smaller, less competitive stores trading below.

Financial Benchmarks

To determine how a business compares in terms of sales volume and financial performance relative to industry peers, it’s necessary to have some insight into industry standards. "Benchmarking" describes the practice of comparing a business’s financial performance to typical industry standards to determine where a business falls relative to other businesses in the same industry. These benchmarks can help guide owners and investors towards appropriate valuation multiples from the range above.

To that end, we have aggregated liquor store business financial ranges useful for comparing a given liquor store business to its peers in the business for sale market.

Liquor Store Business Revenue and Earnings Trends

Revenue of liquor stores sold on BizBuySell peaked in 2021 and returned nominal levels in 2022 and 2023. Revenues increased 10% in 2024, bringing the five-year period from 2020 through 2024 up 5%. Owner's discretionary earnings, on the other hand, increased by 8% during the same time frame. Compared to other types of businesses, these owners are able to pass on increased costs to their customers without too much impact on sales.

Earnings Ranges

Discretionary earnings (used interchangeably with the terms "cash flow" and seller's discretionary earnings or SDE) is often the crux of business valuations, so it is important to benchmark it relative to other businesses traded on the market. Below you will find discretionary earnings ranges for liquor store businesses sold over the past five years, as well as recent liquor store for sale listings.

Revenue Ranges

Revenue volume plays a large role in business valuation, as it measures the size of the potential income opportunity for new ownership. It's not uncommon for buyers to select an earnings multiple range based on overall revenue volume. The table below includes revenue ranges of liquor stores sold over the past five years, as well as recently listed liquor store businesses.

How Revenue and Earnings Level Affects Business Values

Obviously, higher levels of earnings lead to higher valuations, even given the same multiple. However, valuation multiples also tend to rise with business sales volume. Popular liquor stores that generate higher sales (and maintain reasonable profit margins) tend to sell for earnings multiples on the higher end. So, a liquor store generating over $1.5MM in revenue may command an earnings multiple of 3.5 or higher, while smaller liquor stores with sales below $800k may trade closer to 2 times its discretionary earnings.

This tendency for higher sales volumes to fetch higher valuation multiples is largely driven by the economics of business acquisition financing. Higher volume businesses give buyers more cushion to cover debt service obligations and still have enough left over to pay the new owner a reasonable income.

Retail Sector Comparisons

For a more complete understanding of the market and valuation standards, consider comparisons within the broader food service sector when benchmarking liquor store businesses. The chart and table below include key metrics from sales of common retail businesses on BizBuySell.

Comparing liquor stores to others in the retail space shows these businesses tend to enjoy a slight premium valuation relative to their sales/revenue volumes. There are several drivers that make these businesses appealing to small business owners, including stable revenue, a recession (and pandemic) resistant business model, and relatively small space requirements. Perhaps the most valuable aspect of these businesses is the liquor licensing requirement, and limited supply of said licenses. Local competition is reined in by a limited number of licenses granted, giving existing liquor store businesses a meaningful competitive advantage.

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