OGA‘s C-Store Bytes is a bi-monthly series that will feature important information and news occurring within the convenience store industry today. These will be archived on our website for future reference. Please contact OGA President/CEO, Kristin Mullins should you have questions or need additional information.
FDA recently came out with their long-waited rules on the entire e-cigarette and vapor product category, as well as about 50% of the cigar category. The newly released regulations will make it increasingly more difficult for most vapor products to stay on the market unless action is taken.
In its essence, the FDA now requires any product established after 2007 to go through an extensive and costly FDA premarket review process just to stay on the market. This will curtail innovation in the market and deter new products to come into the field. In turn companies will stop making these products and ultimately stores will not be able to afford the costs associated will selling them.
Fortunately there is action Congress can take to alleviate some of these concerns and keep these products on the market. The Cole-Bishop Amendment will allow common sense fixes to the market date while maintaining the integrity and responsibility of marketing these products to adults. NACS has created a website where retailers can contact their Members of Congress to urge support on the Cole-Bishop amendment before the end of the year – http://www.stopthevapeban.com/ Make sure your voice is heard!
We also wanted to send a special congratulations to Glenn Plumby, Senior Vice President Operations for Speedway LLC, on his recent appointment to the NACS Board of Directors at the NACS Show, held in Atlanta last week. Congrats to Glenn and Speedway!
August 31, 2016
October 1, 2015 marked the long-awaited liability shift for merchants across the country to be EMV (EuroMastcardVisa) compliant or risk being responsible for any resulting card counterfeit fraud. Despite the significant investment from retailers, many are still awaiting final authorization and thus are left with equipment that they cannot use. To say there are been continual issues and concerns since the deadline is an understatement – notwithstanding the significant upfront cost but also the ever-growing “chargebacks” retailers receive.
As we look ahead and continue to work on solutions, the October 1, 2017 EMV liability shift for automate fuel dispensers is quickly approaching and many convenience store operations are preparing for the switch – estimated to cost the industry $6 billion to implement. According to a Conexxus interview by CNBC, upgrading fuel dispenser point-of-sale technology could cost as much as $17,000 per pump, which will significantly cut into the bottom line for convenience store operators. Furthermore they added that depending on your operation, convenience stores may have to replace their fuel dispensers or retrofit existing dispensers which could cost more than $6,000 and lead to summer delays for drivers.
In addition to getting a head start on the liability deadline, according to aPayment Week report
, many small businesses and convenience stores are opting out of the EMV standards by pushing mobile payments. Adding on to that, a recent CAN Capital Small Business Health Index found that more than one in three small businesses (34%) accepted mobile payments, such as Apple Pay, which is significantly higher than an April 2015 report which found that number at 13%.
As EMV implementation will continue to be a major issue for the fuel and convenience store industry, we encourage members to consider attending the2016 NACS Show
in Atlanta, October 18-21, where the topic will be a main point of emphasis. As always OGA stands as a research for any questions on this issue or other issues impacting your businesses.
June 29, 2016
In recent years, we have seen an influx of city and municipal ordinances and taxes across Ohio – ranging from minimum wage increases, plastic bag bans/fees, and various tobacco laws. We continue to see the rise of local efforts not only in Ohio, but nationwide as well.
One of the growing, emerging issues that is gaining traction among many US cities, is the implementation of a tax on sugary drinks. According to a recent USA Today report
, a handful of cities across the country have proposals that are singling out sugar-sweetened soft drinks as a viable means of revenue. According to the report, cities including San Francisco, Philadelphia, Oakland, and Boulder, Colorado all have measures that would either add extra taxes or require a health-like warning label for these types of beverages to added.
In the case of the Philadelphia, city council recently approved a 1.5 -cent-per-ounce tax on sugar-sweetened and diet beverages, making them the first major city to enact such a tax. The city plans to start collecting the tax on January 1, 2017.
According to the Pennsylvania Food Merchants Association:
- The tax is not on retailers, but is on distributors. Retailers are required to purchase from distributors specifically licensed to sell sugar-sweetened beverages.
- The definition of beverage includes any sweetened beverage, including those with sweeteners typically found in diet beverages.
- The tax rate is 1.5 cents per ounce for bottled beverages. The rate for syrup is 1.5 cents per ounce for the resulting beverage.
- Beverages containing milk are excluded, but only if they contain 50% or more of milk-based ingredients.
- Beverages containing 50% or more of fruits or vegetables are excluded.
Opponents of the plan have long argued that the tax would hurt small businesses and ultimately they won’t be able to absorb the potential hit while supporters praise the move as additional tax revenue for early childhood education and other community initiatives. While these various proposals are relatively a new trend there is new data out there on the impact of sugary beverage taxes. An analysis of Berkeley, California’s soda tax that took effect in March 2015, which was the first soda tax ordinance in the US, found that the measure raised retail prices for high-calorie sugary drinks by less than half the amount expected – critical information if you look to the point of the tax as a means to make these beverages more expensive so consumers drink less of them. Additionally in Mexico, sales of soda continue to climb, even after the country imposed a 10% tax on sugary drinks two years ago.
May 4, 2016
Although faced with an unprecedented amount of industry and regulatory challenges, including falling gasoline prices, U.S. convenience stores experienced record in-store sales in 2015, according to a new National Association of Convenience Stores (NACS) study released in April.
Convenience stores continue to lead the pack in total fuel purchased across the country with 80% of all fuel purchased occurring within the industry. Although low gasolines caused overall sales in the convenience and fuel retail industry to sharply decrease, they also resulted in driving more customers inside the store which allowed total sales inside of the store to hit a record $225.8 billion in 2015.
The NACS study also detailed the top in-store categories based on sales dollars. The results showed that the top 10 accounted for roughly 80% of all in-store sales and in 2015, nine out of the top 10 had positive sales and all 10 had positive gross profit dollar growth. The in-store sales were broken down by the following categories listed in order of top to bottom: tobacco; foodservice; packaged beverages; center of the store; beer; and other in-store sales.
Overall, the study found that motor fuel sales continue to lead the industry, with 69.2% of total industry sales. However, motor fuel only accounted for 39.5% of profit dollars. Consequently, it can be concluded that although motor fuels continue to drive sales dollars, in-store sales drive profitability.
All the metrics reported in the 2015 study are based on the NACS State of the Industry survey compiled by its own subsidiary CSX. The complete data and analysis on 2015 numbers are scheduled to be released in June in the NACS State of the Industry Report of 2015 Data. For more information please visit NACS at nacsonline.com