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Beer and Wine: A bright future for Ontario?

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0070_Gray_YCM March 2014_Macs Q&AAs the vice-president of operations in central Canada for Mac’s Convenience Stores and as a Canadian Convenience Stores Association (CCSA) board member, Tom Moher has a pulse on the biggest, most challenging issues affecting convenience store retailers in Ontario and across the rest of the nation.

Government advocacy is a top priority for Moher and the retailers he works with, and they’ve come across one of their toughest tests yet: the fight for the right to retail beer and wine in Ontario c-stores.

We sat down with Moher to try to determine how issues like beer and wine retailing can impact the industry, and what retailers can do to affect change and better their businesses.

YCM: What are the biggest challenges facing the convenience industry right now? What are its biggest opportunities?

Tom Moher: The biggest challenges retailers are facing are things such as channel blurring, contraband tobacco, overregulation, and another one they continue to face is increasing electrical costs. These are all things that challenge top line revenues, as well as expenses, and we know the delta between revenue and expenses is profitability, so both simultaneously put pressure on overall profitability.

I think the single biggest opportunity is advocacy to government on these key issues. By that I mean going to government, ensuring they understand these are the key things that are challenging us. For example, things like getting involved in the recent Convenience Store Day at Queen’s Park or contacting your local MP or MPP and letting them understand the challenges facing your small business today. At the same time, we continue to be a very resilient industry, and we’re resilient because we’re well-respected in each and every community we operate in.

YCM: How is channel blurring affecting c-gas retailers, and what can they do to better compete?

TM: Overall, retail continues to eliminate the boundaries between what is convenient, but I think by and large, we need to continue to focus on our key competency, which is ensuring we meet and exceed the needs of our customers who come into our stores every day.

YCM: Why is it important to advocate for beer and wine retailing in c-stores? How will the sale of these products positively contribute to the convenience industry, and to Ontario communities?

TM: Because that’s what customers are asking us for; 67% of consumers want to see beer and wine sold in convenience stores, and first and foremost, as a convenience store operator and as a retailer in general, you want to satisfy the consumer’s needs. Secondly, it can create an opportunity for us to generate more foot traffic to our stores, and it allows us to continue to be a successful industry. And with that additional foot traffic comes a lot of additional opportunities, opportunities for convenience retailers to invest and put more private dollars back into the province. It also affords them the chance to provide more employment opportunities. One of the things we announced with Mac’s a few months back is that we could create as many as 1,500 jobs in the province of Ontario alone in our network if we were given the right to sell beer and wine in our stores.

I think it’s a tremendous opportunity, not only for convenience retailers and consumers, but for the province of Ontario, as well. There was a study completed by Professor Sen at the University of Waterloo, and it showed that by expanding alcohol distribution in the province, we could also generate better revenue for the province and for the government as a whole.

Consumers want it, there’s an opportunity to generate more revenue for the province, and it just makes sense. It’s something that government needs to investigate further, and to speak and engage with convenience retailers. It’s our duty as convenience retailers to let them understand that these are the actual benefits they could see in towns all across Ontario.

YCM: How can retailers and other industry stakeholders demonstrate that these age-restricted products will be sold responsibly in c-stores?

TM: That’s an easy answer: first and foremost, continue to do what you’re doing. We already sell age-restricted products in our stores, primarily tobacco, and convenience retailers as a whole do a better job with age-testing than the Beer Store and LCBO; that was concluded in a study conducted by the OCSA. As a corporation, Mac’s continues to demonstrate the tone from the top, and I would encourage any independent to continue to demonstrate that, as well. We do a good job with training our employees, as do other chains and the independent stores, so I urge them to continue to do that. Retailers should continue to approach responsible retailing with the first and foremost intention of reducing youth access. I think that goes back to the earlier point of the challenge of contraband tobacco. Contraband is not only a challenge for retailers, it’s a challenge to the health of our youth and the access that comes from contraband activities.

YCM: What can retailers do to improve the perception of convenience stores, and to make their customers feel safer and more comfortable in store?

TM: I think they need to continue to be good community hubs, continue to have great service, and continue to have great store standards. In many communities, we’re the start to a person’s day, and we’re the finish to their day. So we just need to continue to be good, positive retailers in that environment, as we are today.

YCM: What do you expect the c-gas channel to look like three years from now?

TM: I see the future of convenience that includes the right to sell alcohol, and with that will come a multitude of other opportunities, which is very exciting and encouraging. It will happen, and it’s going to happen a lot sooner than most people think.

YCM: Do you have any final advice for retailers who are trying to succeed in this competitive market?

TM: Just continue to know your local consumer – know your market and what they want. As they continue to tell us, they want to see beer and wine in convenience stores, so continue to reach out to your municipal, provincial, and federal elected representatives to ensure they understand the challenges facing your business today, and are also aware of the opportunities they can help make happen in our stores in each and every community we operate.