One of the ways government regulations foster retail bigness
1. The rough profit margin for a liquor store is 20% pre-tax. So why in the world retailers in Washington State agreed to pay a license fee of 17% of gross revenue as part of the legislation-referendum to privatize liquor sales is beyond me. Is it any wonder that many stores are closing? See "Squeeze on liquor retailers spurs review of high license fee" from the Seattle Times.
From the article:
Previously, stores were run by the state or through independent contractors. All liquor retailers, including supermarkets and big-box stores, now have to pay a quarterly license-issuance fee equal to 17 percent of all their liquor sales, a provision in the initiative to bring more money back to state and local governments. Many say the fee is too high and is driving them out of business.Only big box stores selling liquor without needing a dedicated sales staff can afford such a provision.
After the industry was privatized, some contractors purchased their stores; other state-owned stores were sold to private business owners through online auctions.
Of the 167 stores purchased from the state, 116 still have licenses, according to the Washington State Liquor Control Board. The Washington Liquor Store Association estimates 60 percent of the former state liquor stores have closed in the past two years.
2. Similarly, George Mason University did a study that found that community banks, which are smaller and tend to make more loans to local small businesses, are being weighed down for having to meet the same regulatory reporting requirements of the largest banks. See "GMU study says community banks need regulatory relief" from the Washington Business Journal.
One size fits all legislation preferences larger organizations at the expense of smaller businesses.