From East to West

Canada’s convenience store industry has been ratcheting up the information campaign directed at government representatives since the release in April of the economic impact report on the industry, Local Presence, National Strength.

By: Bob Armstrong

Copies of the report – showing that Canada’s 23,500 c-stores employ 165,000 Canadians and generate sales of more    than $32 billion – were sent in the spring to all members of parliament as well as Ontario MPPs and Quebec MNAs, says Dave Bryans, president of the Canadian Convenience Store Association. “The whole concept of the report is that convenience retailing in Canada is a very diverse industry,” Bryans says.

Distributing the economic study – which was prepared by Montreal’s elite business school HEC, in partnership with the CCSA, PriceWaterhouseCoopers and the financial group Desjardins – is intended to earn the industry more respect from elected representatives.

Bryans admits that even he was surprised by the finding that more than 10 million Canadians visit a convenience store every day. “I would have guessed three or four million. No one had that figure in their minds.”

The report confirmed that three major factors drive the convenience industry: tobacco, accounting for 80 per cent of legal cigarettes in Canada; lottery tickets, and alcohol in places where convenience stores are able to sell it.

In light of the importance of age-restricted products, the We Expect ID program is essential to protect existing business and make the case for more provinces allowing alcohol sales at c-stores.

The study also showed that the recession that started last year has been hard on c-stores, with 1,875 closing across Canada, including 765 in Ontario alone.

The info blitz grew stronger in late May with the release by the CCSA of Contraband Tobacco in Canada: Time for Action, an attractive, 24-page booklet that sums up data from the 2007 and 2008 youth contraband studies and other sources, such as the RCMP’s Contraband Enforcement Strategy 2008.

“It’s one thing to keep yelling about contraband tobacco – this book offers solutions,” Bryans notes.

The proposed multilevel approach to the contraband issue includes:

• addressing taxation levels that have made tobacco smuggling lucrative

• allowing aboriginal communities to collect and use their own provincial tobacco tax in order to reduce their incentive to support the  contraband trade

• an education campaign about the contraband trade

• implementing and enforcing licensing requirements for the aboriginal manufacturing facilities that supply the trade

• increasing budgets for enforcement, improving border security

• working with the U.S. to curb the factories that supply the illegal trade

Bryans points to a number of contradictions in tobacco law that help to encourage the contraband industry. One is that, while it’s illegal to sell tobacco to a minor, it isn’t illegal for a minor to possess tobacco. Another is that local and provincial police don’t have the power to seize illegal tobacco; instead they have to call in the RCMP.

Spring also saw the CCSA intensify efforts to reach government representatives on the credit card fee issue.

During parliamentary committee meetings on credit cards, the CCSA’s partner organizations in the Stop Sticking It To Us campaign made presentations on the hidden fees paid by retailers when customers use credit cards.

Adding to the concern about the growing number of customers using high-fee premium credit cards is the fact that the credit card companies are now seeking to change the Interac system so that those fees will also rise substantially.

Bryans says the CCSA will work with retailers on a letter-writing campaign aimed at MPs across the country.

The Quebec c-store association – the AQDA – launched a fourth provincial tour June 1 to focus on contraband tobacco in June.

Starting with a press conference at the National Assembly in Quebec City, the 19-day, 25-city tour covered the province. Michel Gadbois, president of the AQDA and vice president of the CCSA, led the tour.

The June campaign came after the province’s minister of revenue, Robert Dutil, said he would not envision reducing taxes on tobacco because he would not want to encourage people to smoke.

But a Leger Marketing survey of smokers and ex-smokers shows that reducing taxes would have little or no effect. The study found that among ex-smokers who have quit since 2001, 61 per cent said rising taxes had no effect on their decision. Only six per cent said they quit smoking because of rising taxes.

Among current smokers, none said that raising taxes would cause them to quit.

The results of the study are detailed on a new website launched by the AQDA (quebeccontrabande.com), featuring responses to a series of six myths about tobacco and taxation.

In Western Canada one of the biggest stories of the spring was the May reelection of the Liberal government in British Columbia.

That came as a relief to the Western Convenience Store Association after the opposition NDP campaigned for the 25 per cent increase in the minimum wage to $10 per hour.

“In this economy that would cost jobs,” says Wayne Hoskins, president of the WCSA. “When you increase the minimum wage the ripple effect goes all the way through the business.”

Hoskins met with re-elected Premier Gordon Campbell June 2 and was impressed that “this government is open to consultation...they want to hear from us.”

With the election over, the WCSA is preparing to test safety barriers required under the new B.C. worker-in-isolation legislation. The association has applied for building permits to construct barriers
in three stores to separate store staff from customers – the key provision of the new legislation – and will test them later this year.

Throughout the region, the association is working with government and Crown agencies, sending the new State of the Industry report to all western MPs and MLAs and building political support for c-store issues.

Hoskins was expecting a big turnout in Red Deer in June, at the WCSA’s Alberta trade show, where he was expecting keynote speaker Ralph Klein to speak in support of beer and wine sales stores in
c-stores.

In May at Convenience University, the annual trade show, Hoskins spoke at a panel at which he urged cstores responding to difficult economic times or competition to ask themselves what they can do to respond to customers’ desires.

“Ask yourself ‘what are we famous for?’” he said.

Throughout the spring, the WCSA worked on building an inclusive C-store sector across the region. Hoskins is discussing bringing the Korean Businessmen’s Association into the WCSA and is seeing more First Nations businesses join as well.

“They all add something to the association’s fabric,” he says. “It makes us all stronger.”