‘We’re not even holding our heads above water.’ Sales tax records show NWA bars struggle while liquor store sales skyrocket

FAYETTEVILLE, Ark. (KNWA/KFTA) — Bars and restaurants have been hit hard by COVID-19, but that doesn’t mean people aren’t drinking. Sales tax numbers from March 2020 through the end of the year indicate liquor stores are having record years, while bars’ revenues have plummeted.

Jamie Wilson owns C4 Nightclub & Lounge in Fayetteville, an LGBTQ-friendly spot that is known for its dance floor and social atmosphere.

“We just turned six [years old] and couldn’t do any flairs or anything like that,” Wilson said.

Capacity restrictions, safety requirements and a recently-extended 11 p.m. shutdown directive have all taken their toll on C4. The Dept. of Health and governor’s office directive declared bars and alcohol-serving restaurants to be places where COVID-19 spread could potentially occur due to increased socialization.

“This month, we’re not even holding our heads above water,” Wilson said. “The morale of the staff, it’s just not as fun. It can’t be, because you can’t dance, you have to have the masks on.”

The window to generate money is slim, and Wilson said staying afloat isn’t easy.

“I would have to say that we have one month left, the way the bank account looks,” Wilson said.

David Sorto is a research assistant in the University of Arkansas’ economic department. He said sales tax revenues charted from March-Nov. 2020 revealed a trend with alcohol sellers. Alcohol consumption has increased overall, but people have changed their purchasing habits.

“Bars have been hit very hard, and liquor stores have done very well,” Sorto said.

Liquor stores in Benton and Washington Counties hauled in significant revenue spikes. Benton County liquor stores generated $75,531.15 (29%) more in sales tax revenues than they did during March-Nov. 2019, while Washington County increased its total by $149,889.82 (29%).

Bars, on the other hand, generated $10,193.96 (-23.2%) less in Benton County and an enormous $52,897.79 (-42.9%) in Washington County. Sorto attributed the latter to Fayetteville’s dynamics and indicated this could be a similar trend in future months.

“Unfortunately, for bars until the numbers of COVID go down, we’ll likely continue to see this decline in business,” Sorto said.

Spots like JJs in Fayetteville operate as a restaurant in the day, but they’re losing out on revenues from alcohol sales at night. Richard Tolleson is a manager at JJs, and he said business has stayed steady during the food-oriented period. Still, he said the state is pointing the finger in the wrong direction.

“I do feel like we’re getting unfairly punished because we’re doing our best to make it better for everybody,” Tolleson said. “I think it affects everybody: local businesses, small businesses.”

C4 and others are almost completely dependent on alcohol sales, and they are unable to rely on food sales. For that reason, Wilson said he’s considered starting a GoFundMe page to keep the night club operating. Sorto said future state funding should be targeted toward bars considering their clear economic standing.

“I’m not sure if there’s any discussions about the state coming up with a small stimulus package or any grants to help specific areas of the economy, but it seems like the bar sector is one that would greatly need assistance just based upon these tax figures,” Sorto said.

Wilson said the next month will be notably challenging, and survival isn’t guaranteed.

“It’s rough,” Wilson said. “Mentally, it’s a ‘mind blank.’ Fill in the blank there.”