Convenience store industry sales have posted solid gains over the past decade and, by all accounts, 2019 was another strong year. A lot of hard work, capital investments and employee training goes into making c-stores a destination for customers of all ages and backgrounds across the country. For most industries, this hard work would be celebrated.
Convenience stores are not most industries.
The relentless pursuit of c-store profits by federal, state and local governments — not to mention Visa and MasterCard — has been ongoing for decades. The industry has not been seen as a successful channel of trade to lawmakers, but rather as a cash cow to fill their coffers. This hurts the industry from top to bottom.
While larger chains are more visible, the majority of businesses have under 25 stores and struggle to drive profits. Virtually every chain I’ve covered over the past 20-plus years in this industry has counted on earnings and profits to reinvest in the business. That includes hiring more employees and helping to stimulate the local economy. It’s business economics 101.
However, lawmakers at all levels see nothing but dollar signs as they continue their aggressive attacks on the industry, especially as it relates to tobacco and vape products. We are heading into 2020 with some of the most restrictive legislation to date.
Tobacco taxes raise hundreds of millions of dollars for a state when tobacco is sold by responsible retailers to legal-age consumers, yet history shows overzealous state, local and federal politicians have become masters at biting the hand that feeds them.
In New Jersey, for example, state lawmakers raised cigarette taxes in 2006 to the highest in the nation, then found themselves perplexed when the number of smokers in the state stayed the same, but tobacco tax revenue declined. In the 14 years since, little has been learned.
Take Massachusetts, which in December passed a ban on flavored tobacco, including vaping products and menthol cigarettes. The bill also imposed an outrageous 75% excise tax on vaping products. The Feds piled on to this by increasing to 21 the legal age to purchase tobacco and outlawing vape flavors. We can send 18-year-olds to war, but we must protect them from citrus vape? Give me a break.
Despite infringing on the rights of adult consumers, all these regulations will do is drive sales to neighboring states and the black market. History shows this is an absolute certainty.
Instead, lawmakers will have wasted an opportunity to work with retailers on a fair and equitable plan to sell and tax tobacco fairly to adult consumers. Tobacco regulations and taxes are unavoidable, and few retailers argue this. What retailers want is to participate in the discussion.
That is why the collective voice of c-store retailers matters more than ever. Whether it’s increasing tobacco taxes, rising minimum wages or credit card fees, c-store owners need to make their voices heard.
Effective state and local lobbying requires c-store owners to establish meaningful relationships with lawmakers to share the impact their businesses have on the communities they serve as employers, and as supporters of local schools and other important local programs. When retail profits fall, these programs will be the first to suffer. Employees will be second.
It is incumbent on c-store owners to contact their local legislators. Invite them to your stores, visit their offices and make regular phone calls. Tell them about the good you do in the community and how important your funding of local programs is to thousands of their constituents. Your words and actions can have an enormous impact, but you have to make your voices heard.
For any questions about this issue or suggestions for future issues, please contact me at [email protected].