By CSD Staff
There’s no shortage of pundits who assert that compliance with governmental rules and laws is a greater encumbrance on small companies than large ones, thwarting small business formation, growth and job creation.
The federal government’s track record of increasing regulatory burden on American companies extends to the convenience channel. More and more that burden has encroached on c-store food offerings.
Two food-related mandates that have climbed to the forefront of c-store concerns are Supplemental Nutrition Assistance Program (SNAP) criteria and menu labeling. Both were hot-button issues during 2016. It was just recently, however, that some new SNAP mandates initiated by the U.S. Department of Agriculture (USDA) were altered—to the relief of many c-stores.
For example, the earlier version of the rule would have required that 85% of a store’s food sales be from items that are not cooked or prepared at the location. Opposition pushed the USDA to trim the requirement to 50% of gross food sales. Also, the language was clarified, specifying that healthy snacks can count as staple foods.
“What I would add is that the Food and Nutrition Service (FNS) heard our comments and complaints about the proposed SNAP rule loud and clear,” said Jack Kofdarali, immediate past chairman of the National Association of Convenience Stores (NACS). “The final comments (ending May 18, 2016) helped to vastly change it in our favor. While we do still have some questions for FNS we consider this a huge win for our industry.”
He acknowledges the final rule is still complicated.
Some studies indicate that many Americans, including the 15% of rural households that are food insecure, live several miles away from grocery stores or have restricted transportation options.
C-stores such as Kent Kwik—part of the Kent Cos., based in Midland, Texas meet an important need in these areas. Bill Kent, president and CEO of Kent Cos., said SNAP isn’t a highlight in every one of Kent Kwik’s 41 stores, but is a critical service at many locations.
“It varies from store to store, but it’s very important,” Kent said of his company’s participation in SNAP. “We need to be a part of it. We want to be a part of it. And in some stores, it’s a substantial part of their business. It’s important to the whole industry.”
A host of states have levied taxes on sugary drinks. Critics have argued that such taxes don’t help to reduce consumption, and that they feed bureaucracies that waste money instead of helping the public. Kent agrees and anticipates that new Trump administration will work to pare down some of the spread of government regulations that hovers over U.S. c-store operations.
“You hope there’s a general reduction in this regulatory creep that occurs,” said Kent, who serves on the NACS board, including its legislative committee.
“It’s like a glob that just keeps growing and consuming more and more.”
As part of the Affordable Care Act passed in 2010, the rules mandate that restaurants and retailers selling prepared foods in 20 or more U.S. locations must place calorie counts next to menu items or on menu boards.
Scheduled to be enacted industry-wide next year, the menu-labeling rule will tax retailers’ resources, said Kofdarali, who also serves as president of Corona, Calif.-based J&T Management Inc., that up to a year ago had operated 28 Arco/ampm stores in southern California.
Last year, Kofdarali sold 24 of those stores and is looking at other industry opportunities.
“The new administration is aware of the importance of fixing the menu labeling law,” said Kofdarali. “Congressional leaders have indicated it is near the top of the list of regulatory changes in need of swift action in 2017, as retailers are already beginning to spend money to prepare for a May 5, 2017 compliance date.”
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